How to Package Your Investor Data Room

All startups looking to raise funds should have an Investor Data Room in place, which should include live finance metrics. Learn what it is, why you need it, and how to package it.

Try Whaly

Thousands of users rely on Whaly every day to monitor and improve their revenue. Join them now!

How to Package Your Investor Data Room

So, it’s time for your startup to fundraise. The process of attracting investors and convincing them of your business's potential can be both exhilarating and daunting. While we know you’ve been busy creating your pitch deck, trying to acquire most customers, and working on developing the product, there’s one key tool that shouldn’t be overlooked — the “Investor Data Room.”

What is an Investor Data Room?

The concept of a “data room” has been around for a while, and used to refer to a tangible, physical room in which businesses securely stored their important financial files. A space in which potential investors can access confidential information that might not be included in a pitch deck. It’s how investors will do their due diligence and verify that everything you’ve pitched is really true, which helps them get a deeper understand the risks and value of what they are putting their capital into.

These days, the “data room” term has stuck, as has its importance, but it’s now almost always a “virtual” space. Today, it refers to a secure online repository in which startups can organize and store their essential information, in the form of documents and data, that potential investors can access during their due diligence process. Think of it as a digital library that contains everything an investor might need to make an informed decision about investing in your company. This ranges from financial statements and business plans to legal agreements, intellectual property documentation, and market research.

Why every startup needs an Investor Data Room:

While it can take time to organize and store this information, we believe all startups should have an Investor Data Room ready when they begin their fundraising journey for their next round. It’s never too early to start creating one. Regardless of your company’s stage, it’s always a great exercise and a good habit to put one together early, and to keep it updated over time.

Here are some reasons why we think it’s important:

  1. Efficiency: Traditional due diligence processes involve sending documents back and forth via email, which can be time-consuming and prone to errors. An Investor Data Room streamlines this process, allowing investors to access all necessary information in one centralized hub.
  2. Professionalism: Providing potential investors with a well-organized and easily accessible Investor Data Room demonstrates professionalism and a commitment to transparency. This can significantly enhance your startup's credibility and trustworthiness. It shows them that you’re being upfront with all your information, and helping them make an informed decision.
  3. Control: With an Investor Data Room that lives in one centralized location, you’ll have greater control over the information you share. You can provide access to specific documents for different investor groups, and ensure that sensitive data remains confidential until a deal is finalized.
  4. Time Savings and Faster Funding: Having all relevant documents readily available reduces the back-and-forth communication between your team and potential investors. This saves time for both parties and keeps the due diligence process moving smoothly. It will likely even help the decision be made faster.
  5. Competitive Edge: We all know that today’s funding landscape is competitive. During these times, having an Investor Data Room sets your startup apart and makes it stand out. It signals that you are proactive, organized, and serious about both securing investment and the road ahead

Creating an Effective Investor Data Room

  1. Choose the Right Platform: There are various online platforms designed specifically for creating Investor Data Rooms. Look for one that offers secure access controls, user-friendly interfaces, and the ability to track investor engagement. Generic “storage” solutions like Google Drive and Box can also serve as a Data Room, but you’ll have to ensure to keep it organized.
  2. Organize Documents Clearly: Categorize and label documents intuitively, and in a logical way that people can sort through without asking you questions. Common sections include Executive Summary, Financials, Legal Agreements, Intellectual Property, Market Research, and Team Bios. This makes navigation much faster and simpler for investors.
  3. Keep it Updated: Your Investor Data Room should be a dynamic resource. Regularly update financial reports, growth metrics, and other relevant information to reflect your startup's current status. This is important, and is particularly tricky when reporting your startup’s financial metrics, like MRR, which change as you grow. See below for more info on how to keep your metrics fresh and always accessible.
  4. Security is Key: Security should be a top priority. Choose a platform with robust encryption and data protection measures to ensure that sensitive information remains confidential.
  5. User-Friendly Interface: Make navigation easy for investors. Consider adding a search feature, clear labels, and an index for quick reference. The more you can remove friction and make it a painless process for them, the more you'll probably get rewarded!
  6. Customize Access Permissions: Control who can access what. Tailor access permissions based on investor type and stage of engagement to maintain confidentiality until a deal is reached.
  7. Consider Including a Q&A Section: Add a Q&A section where investors can ask questions directly. This centralizes communication and prevents any misunderstandings from happening.

What it should include

  • Accounting financials, like your Balance Sheet and your P&L
  • Incorporation & Legal Documents
  • Company documents: Pitch deck, Voting agreements, Articles of incorporation (including amended and restated), Investor rights agreements, Partnership agreements, Board meeting minutes, Customer contracts, Shareholders' agreement, Market research and analysis, Sales process, Marketing materials, Business plan, etc.
  • Intellectual Property information
  • Employee contracts
  • Previous fundings
  • Startup growth / revenue metrics, ideally in real time

Don’t be too overwhelmed when you get started, since you’ll likely be missing some information that is deemed to be “critical,” but just go for it and keep adding as you go!

Startup Metrics - Putting the “data” back into data room

While “data room” by definition refers to the overall central repository of tons of documents and information, as explained above, we wanted to highlight the importance of the pure data part — the startup metrics. It’s worth pointing out that there’s a reason “data” is included in the name itself, even if it can be misunderstood as a big dump of files and information. So, let’s not forget about the data itself!

This part is crucial, and if I was an investor, the startup metrics are the main I’d want to see and monitor. In my view, it’s the greatest overall indicator of your company health and potential. Depending on the business model of your startup, these key financial metrics might differ slightly. In SaaS, for example, investors will always want to know your:

  • MRR (Monthly Recurring Revenue)
  • MRR Growth Rate
  • ARR (Annual Recurring Revenue)
  • CAC (Customer Acquisition Cost)
  • Customer LTV (Lifetime Value)
  • Churn Rate
  • NPS Score
  • User Growth
  • Gross Margin

What’s the best way to package and show the data?

While Excel spreadsheets and powerpoint slides are common ways of sharing data visualizations of growth metrics, it will be impossible to keep this data updated and accurate, without manually calculating these formulas on a daily basis, and uploading them in to the data room repository. That’s an extremely heavy lift, and very time consuming!

A better way is to leverage a BI platform that displays these metrics in a dashboard (or a series of several dashboards), which you can share externally to your investors in the data room. The BI platform pulls data directly from your data warehouse, so that the information is updated live and can always be refreshed.

BI platforms like Whaly offer the ability to quickly get up and running with your revenue dashboards, in as little as 1 week. Once you set up these dashboards, our “Portals” feature allows you to share dashboards externally and manage user access. You can even fully customize and brand these dashboards to your investors’ brand colors and liking - to appeal to them even more.

This allows for a great, packaged way to showcase your live revenue metrics. Plus, they’ll be impressed that you’ve set up a scalable foundation on which you constantly track and monitor your data, as opposed to spending tons of time number-crunching in Excel for every metric request. It shows that you value efficiency, and that you're a data-driven founding team.

This way, you can also reduce the back and forth and number of questions you’ll get from potential (or existing) investors. They can access the dashboard themselves, whenever they need the numbers. Once you have the dashboards ready in an external link, you can simply include them somewhere in the data room.

In summary, an Investor Data Room is a powerful tool that can streamline the due diligence process, enhance credibility, and provide startups with a competitive edge in your search for funding. By creating a well-organized, secure, and up-to-date repository of essential information, startups can convey transparency, professionalism, and preparedness to potential investors. With a BI platform in place to showcase a live view of your startup metrics, you can appear even more proactive and impressive to investors. Consider creating customized dashboards specifically for your investors, with all the metrics they care about, and save time and effort on manual number-crunching.

Want to get started with an investor dashboard for your Investor Data Room? Try out Whaly for free today!

Try Whaly


Thousands of users rely on Whaly every day to monitor and improve their revenue. Join them now!

Learn moreStart your free trial