A startup data room for startups is a storage space, mostly digital, where startups store relevant information about their business, for internal use or other stakeholders. The most common use case is to use a virtual data room saas for an investment round, as it allows to streamline the processes of professionalized investment rounds.
The SaaS data room not only includes data related to an investment round, but can also contain other valuable data for internal or external use.
Why is a startup data room so important for investors?
VC, an accelerator, a business angel, a mentor… does not know about your sector (unless they are also dedicated to it), but they do know the key metrics of the business model: Saas, ecommerce, marketplace… A good data room helps to understand the value of the business, without the need to know the sector in depth. In addition, it can also be very useful to consult structured information more easily, as it is not little and we will go into detail later on the benefits it brings us.
What are the benefits of implementing a data room for a startup?
The advantages of having a data room for a startup are many, let’s see them below:
- It transmits seriousness and professionalism. Everything is in place. The most advanced data rooms give veracity since they contain real and reliable data obtained directly from the different datasource.
- It allows you to control the flow of information. You can choose what information to share and when to share it. This allows you to prevent sensitive information from becoming public.
- Security and access control. A good data room allows you to track investor interest. You can see who is accessing the space and what materials they are consulting. You can see this functionality here.
- Open organization with your collaborators: You can keep your team up to date, with the information, filtered, whenever they want to consult it.
In short, a data room is an environment controlled by the startup to answer the questions of investors or any stakeholder in a secure and controlled environment.
The data room of a Saas, not only includes data related to an investment round, it can also contain other valuable data of external or internal use, as they can help in the process.
Main mistakes when creating a startup data room
- Only be used for investment.
- Do not control access to information.
- Do not restrict permissions.
- Show too much information.
What information should a data room for Saas business models include?
The documents in a data room should provide a clear picture of the startup, its financial situation and growth potential.
Some of the key documents you should include in a data room for a Saas are the following:
Financial documents that a data room should include:
- Business plan . Not a 40-sheet business plan. A good projections with several scenarios is enough, showing the current situation of the company. It should include at least the following documents:
– PYG. Profit and loss account. To show the current situation of the company.
– Cash flow. Cash is king. Cash control in a startup is key. Startups don’t die for not selling, they die for lack of cash. Here you can download the business plan template.
In this article on saas business plan you have more information on how t
How to make a saas business plano fill in your template:
What is a data room for startups? Explanation with real examples so you can create your own.
Investor Deck. The investor deck is a presentation of the key points of a startup. It is the letter of introduction to the investor. Here is a good post: How to make an investor deck.
- One pager. One-page summary of a startup’s key points for the investment search. It should include information about the company, the investment round and the most relevant metrics.
- Cap Table. Who are the partners of the company, in what percentages and conditions.
- Information from previous rounds.
- Due diligence. Audit process before signing the investment.Term Sheet. The Term Sheet is the document where the conditions related to the investment are stated.
- Partners’ agreement.
Startup customer information in a data room
- Active customers.
- Active users (people who actually use your service).
- Definition of active user.
- Market Research
- Customer contracts
- Customer pipeline and its value.
Technical documents of the startup that a data room must contain
Last but not least, product and technology. This is a key component that many founders overlook. In terms of technology, here are some of the documents that data room for investors can include, although these tend to be less common:
- Existing products or functionality.
- System architecture diagram.
- API documentation.
- Product backlog.
As you can see, the list can be long, but don’t get overwhelmed. Start small with what you have, and remember that our resources can help you.
How to create a data room for a startup?
Finally, to create a data room, you must first identify the stage your startup is at and what information you are interested in including.
Best data room options for a Saas
If your business model is a SaaS, you have the following options to create a data room:
- You can start with a shared folder with Google sheets or similar.
- Create it on your own server.
- You can also rely on tools to solve these problems, you can use data extraction, processing and visualization tools such as Next Scenario.
Remember that the one pager and the data room are your letter of introduction and are key in the impression you transmit to investors. They receive hundreds every month. Differentiate yourself.