One of the first parts of a fundraising or exit transaction is a process called “due diligence”.  As part of this process, investors will generally ask their lawyers to carry out legal due diligence. The first thing their lawyers will normally do is send through a list of documents they want you to make available in a dataroom.

To help founders understand exactly what needs to be included, we’ve put together an online dataroom guide and toolkit. We cover the key points of focus for investors that frequently crop up during the early phases of an investment transaction.

Click here to view our online dataroom guide or download our handy toolkit here.

Many founders don’t build their dataroom until an investor asks them to. However, building your data room early, before anyone asks for it, has some key advantages.

Shows you where the gaps are

First and foremost, it will show you where the gaps and issues are.  Sometimes filling a gap will just take a call to an old employee, but sometimes you might have to do some work to fix it. Getting this sorted early is much quicker and less stressful than doing it during an investment round.

A quicker and smoother transaction

If you don’t start digging through your files until the lawyer sends you their shopping list, the process is going to take longer than if you’ve already made a start.  A lot of founders also find the data room structure helpful in keeping a good handle of company paperwork on an ongoing basis.

Improves investor confidence

By providing investors with easy access to comprehensive and up-to-date information, a dataroom can instil confidence in your startup's management team and ability to manage the business effectively.  This transparency can help build trust and credibility, which are essential for attracting investment.

Got any questions? Our team are here to help.

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