Overview
The Data Room is a folder of diligence material you share with your investors. Usually, they will ask for access when they are diving into diligence on the company.
Strategy: 2 Data Rooms
To strategically manage investor access and protect sensitive information, some founders choose to structure their data rooms into two levels. Level 1 serves as a basic data room shared with all interested investors, containing only the essential materials needed to validate the company and spark engagement—such as a high-level pitch deck, summary financials, and a redacted customer pipeline. This level offers enough transparency to move conversations forward without revealing sensitive details. Level 2, on the other hand, is a more comprehensive data room that is only shared with investors who have issued a term sheet. It typically includes more detailed financial models, full cap tables, legal documents, and other confidential materials appropriate for formal due diligence.
Some things to keep in mind when setting up your data room:
* Recommend using Google Drive or Dropbox or another shared folder service. Keep a "Master" folder for yourself and make copies of this for each investor. That is, have a separate data room for each investor.
* In general, Alchemist's philosophy is not to share everything that will be required for diligence in the data room. We want to share the least we need to give the feeling of getting access to basic diligence materials. But we don't want to share material that may cause the investors to ask questions they weren't normally thinking of (e.g. if you have an extensive Competition folder, it may raise issues they didn't think to ask).
* The approach should be to give them a basic data room and have them ask you for further diligence as needed and then populate their individual data room with that info as asked.
* We also don't want to share highly confidential info you would be worried if it got leaked out. You can docsend (or comparable tool)-enable any sensitive info to track who's looking at it.
* Create a folder structure that is strategic, clean, and easy to navigate. Have it hint at how you think about the business (e.g. you could have a Growth folder instead of Strategy). Ensure your structure is as simple as possible.
* Allow read-only rights! You do not want 3rd parties downloading/editing your company data.
* Create an update cadence for the Master. Make sure documents are fresh.
Now that you have an idea on setup/organization, here is a list of items to include in your data room regardless of the type of company you operate or stage of funding:
What should you include in a Data Room?
Administration
Capitalization table
Certificate of Incorporation
Wiring Instructions
If you've had a major financing:
Deck
One pager (Optional)
Exec summary Pitch Deck
Financials & Metrics
Historical KPIs
Profit and loss statements
Pro-forma statements for next year
Unit Economics: LTV / CAC analysis
Projections
Growth or Strategy or Sales & Marketing Materials (Optional)
One-pager
Pitch deck
Redacted Pipeline (Can replace names -- e.g. Procter & Gamble -- with Fortune 100 CPG company. And replace Titles and Names -- e.g. instead of Jane Doe, VP Marketing, just say VP Level Contact
Intellectual Property
Granted and filed patents
Trademarks
IP strategy
Product / Market Research (Optional)
KPIs you want to share
Market studies / press articles
Competitive analysis (optional)
Human Resources
Background of founders and key leadership team
Advisory board
Organizational chart
Hiring plan (1 year)
Technology
Don't share anything highly proprietary. Just high-level documents you are comfortable sharing -- e.g.:
System architecture diagram
API documentation
Details on any large integrations
Product backlog export and release map
Screenshots of existing products
What should you not include?
Don't share anything highly confidential -- core algorithms / IP, your full sales pipeline, customer leads, etc. These can be discussed in person with the VC, or redacted versions can be provided if it's highly sensitive. In general, share enough so you seem legit but have them ask for additional items.