Once an investor is interested, they will want to see the detail. That detail lives in the data room: a secure online space holding the documents that support everything you have claimed.
A well-organised data room shortens diligence. A messy one slows it down and raises questions about how the business is run.
What to include
Organise it into clear folders, typically:
- Corporate: incorporation documents, articles, shareholder register, board minutes.
- Financial: statutory accounts, management accounts, the financial model, tax filings.
- Commercial: key customer and supplier contracts, pipeline, pricing.
- Legal: material agreements, intellectual property, any disputes or claims.
- People: organisation chart, key employment contracts, share options.
- The raise: the information memorandum, term sheet and instrument documents.
- Property and assets, where relevant, especially if they form security.
Making it usable
- Name files clearly, with dates, so an investor can find what they need without asking.
- Keep an index at the top level listing every document.
- Use the latest versions only. Old drafts cause confusion.
- Control access. Give each investor their own login and see what they view. It tells you who is serious and what they care about.
- Answer questions in one place, with a log, so every investor gets consistent answers.
Start early
Build the data room before you start the raise, not when an investor asks for it. Pulling documents together under time pressure is where gaps and inconsistencies appear.
Starting early also shows you what is missing: an unsigned contract, a lapsed filing, a document you cannot find. Much better to discover these yourself than to have an investor find them.
A clean, complete data room tells investors that the company is organised and has nothing to hide. That impression is worth a lot.
Mark Johnson is the Founder of BDM Capital, which introduces capital raising opportunities across bonds, loan notes, IPOs and SEIS/EIS. To discuss a raise, get in touch.
Frequently asked questions
Into numbered folders that mirror the diligence list: corporate, financial, legal, commercial, people, intellectual property, property and assets, and the raise documents themselves. Every file named so that it can be found without opening it.
Named individuals at each investor and their advisers, added as they enter diligence, with access logged. Staged access, releasing sensitive material only to committed parties, is normal.
Purpose-built virtual data rooms offer access control, watermarking and logging. For smaller raises a well-structured, permission-controlled cloud folder can be adequate if it is kept tidy and access is reviewed.
BDM Capital is not authorised or regulated by the Financial Conduct Authority. This article is general information, not financial, tax or legal advice, and does not constitute an offer or invitation to invest. Capital is at risk and you may get back less than you invest. Written for founders and directors of businesses considering a raise. Take independent professional advice before making any investment decision.
