THE CUBE DATAROOM

If you’ve got more than one company in your group structure, then you should include a diagram to show what it looks like.

Make sure to annotate the diagram with ownership percentages if they aren’t all 100% owned. Also include the home jurisdiction of each company if they’re not all in the same country. Don’t forget to use the companies’ full legal names along with their registration numbers.

Whatever you’re using to keep track of your shares, options and convertibles (if you have them!) goes in here.

If you don’t have a cap table, then it’s worth putting one together in advance. An investor will be able to figure out your current cap table by looking at your history. However, it inspires more confidence if you’re able to show them that you’re on top of it.

An investor will want to see the governing documents of your company to understand the relationship between the company and its shareholders. They'll also want to get a sense of what rights existing shareholders have.

These documents are usually made up of articles of association and, sometimes, a shareholders’ agreement. If the company is very new, it might have been incorporated with the default set of “model articles.” If that’s the case, there won’t be much to include here.

If the company has adopted bespoke articles or has separately documented arrangements in an agreement that governs the relationships between the shareholders and the company, you should include those documents here.

The main registers an investor will ask for are:

• The register of shareholders – a record of a company’s shareholding
• The register of directors – a record of a company’s current and previous directors
• PSC register – a register of individuals who have “significant control” over a company (this is usually anyone with over 25% of the shares)

Companies are legally required to maintain up-to-date registers, however, it’s common for startups to forget about them until an investor asks.

Top tip – have your registers ready in advance of a transaction. Depending on the number of shareholders you have, they can take time to draft.

Every time your company has issued shares, there will be paperwork that goes with it. As a minimum you should include the board decision (minutes or resolutions) and any shareholder or investor permission as well.

If you’re company has had multiple rounds of funding, you should break these into subfolders for each funding “event”. The pack of the signed paperwork for each investment will be its own subfolder. Any other share issuances might be another folder in between.

Top tip – use numbers in the folder names to keep them in chronological order.

You’ll also need to highlight anything other than the issuing of more shares. This could include the transfer of shares between founders, transferring shares back from a founder or early employee who left or the conversion of shares from one class to another.

Include details about your option scheme here. If it’s not in your cap table, then a spreadsheet showing how many options you’ve granted would be helpful. If you have a central “scheme rules” document, include that too.

If your options with individuals are all on the same terms, then a template is fine. If each employee has a different deal, then include the document for each optionholder.

If you have an EMI scheme, make sure you have the letters from HMRC setting out the approved market value of your EMI options.

You should also include any other document you have which means someone could get shares in the future. This could be an investor document like a convertible loan, SAFE, advance subscription agreement, etc. or it might be a commitment you’ve written into a deal with an advisor or a big customer.

Create an anonymised spreadsheet with key information about your employees, including length of service, usual work location, salary, job title, hours (if not full time) and any benefits. If you already track this information then just remember to anonymise it when it goes in the folder.

You will need to include any standard employment terms. If you’re a larger company, you might have multiple different standard terms, e.g., one for senior employees and one for junior employees. If anyone has a bespoke arrangement, include an anonymised copy of their contract.

Top tip – in the early stages of the business you may have multiple pieces of paper with each employee as you deal with things like intellectual property and confidentiality separately. If that’s the case, put those documents in here as well.

An investor is going to want to see the employment agreements of the founders. Don’t worry if your current founder employment agreements are out of date – as investors are very likely to want you to update them with their own comments as part of the investment round.

If the company has any directors in addition to the founders, their director service agreements should go in here. 

A similar spreadsheet as the one mentioned in the Employees section, but for your consultants. An investor will be focused on the terms of payment and scope of work for your consultants.

If you engage consultants on standard terms, they should go in here too.

Are any of your employees working for you on a working visa? If so, include your sponsor licence from the UK Home Office.

If you have more than a couple of employees, an investor will want to make sure that the company has policies in place for workplace behaviour, anti-harassment and discrimination.

If your company has employees, you’ll need to have a pension scheme in place.

Your pension scheme will have scheme rules which sets out the pension terms and level of employer contribution. 

If your company relies on a handful of key customers who make up a large proportion of revenues, you'll likely be asked to identify those customers and set out roughly what percentage of the company’s revenues they are responsible for over a certain period. Generally, the previous financial year. Also include your contracts with these customers.

If your company’s customers are spread widely, you can just include standard terms and conditions.

Does your company rely on a handful of key commercial suppliers? If so, an investor will want to know who those are and look at the contracts you have with them. 

Most data controllers in the UK need to be registered with the data protection supervisory authority, the Information Commissioners Office (the ICO). These records are available on a public register, but it’s good practice to provide a copy of this registration to demonstrate that the business is meeting a basic obligation.

Data controllers have obligations to inform data subjects, such as employees or customers, about how and why their personal data is collected and used. In some cases, the consent of the data subject is required (for example, in most forms of electronic marketing).

An investor may ask the company to demonstrate how it provides information to data subjects. This could include privacy notices and cookie notices, along with how the company obtains the required consents.

If your company processes customer data, you should include documents to demonstrate how you recognise and respect data rights requests, including requests to access or erase customer data.

Where another company processes personal data on your behalf, such as a service provider, or you process personal data on behalf of another company, a data processing agreement must be in place. These agreements impose contractual obligations to control how personal data can and can’t be used. It also covers matters such as instructions for processing, information security, audit rights, retention of data, and deletion of data at the end of the contract.

If this applies to your business, then include a template copy of your data processing agreement along with any data processing agreements for your data processors.

Any letters or other documents relating to personal data breaches, data subject complaints, or any investigations by the ICO or other regulators should be included.

Top tip – a “gap reporting exercise” audits the business and identifies “gaps” in compliance. If your business processes a lot of personal data, gap reports can reassure an investor that the business is aware of where data protection improvements need to be made. It also shows you have a plan for fixing any issues.

As a starting point, you might want to prepare a document that lists the material IP the business uses. Divide the list into sections:

1. Set out the material IP that the company owns – include any software or code that has been developed in-house as well as any patents, trademarks or logos the company has.
2. Set out the material IP that the company licences from third parties – include any AI models or SAAS products licensed by the company.

Top tip – remember that IP does not only cover IP that is registered with an authority, such as a trademark or a patent. It also covers unregistered IP like copyright, software, code, ownership of domain names, designs, know-how, etc.

Any information relating to trademark, design or patent filings you have made. You should include a clear indication of the country in which protection has been sought, details regarding the mark/patent title/design image, any application or registration number and filing details.

Your company should have a licensing agreement in place if it's licencing IP to generate revenue, expand the business geographically or launch new product lines. Your company will also need a licensing agreement in place if it licences someone else’s IP.

Technically, we all licence IP we don’t own on a daily basis. The terms are based on licence terms included in standard T&Cs. For example, every time you use an app on your phone you will be using someone else’s IP under a licence. An investor therefore won’t expect you to list out all those licences here – their focus will be on:

1. Exclusive licences, being a licence which means that no one else can use the IP in question
2. Sole licences, which is a licence where only you and the owner can use the IP
3. Licences which are on non-standard terms

What does your IT estate look like? Include a document which outlines:

1. What computer equipment the company owns
2. Whether employees use their own equipment in carrying out work for the company
3. What SaaS products the company uses
4. What domain names the company owns

Top tip – you might find that you registered the domain names personally during this exercise. Now is a good time to transfer the ownership of those domains to the company.

If you have agreements for any part of your IT stack, add them into a subfolder. If you’re just making purchases on standard terms from big providers then no need to dig through their website and find their T&Cs at this stage.

An investor may want an understanding on your business interruption and disaster recovery process. If your company is in its early stages, it’s probably relying on the redundancy and backup provisions of the hosting provider. Regardless, it’s helpful to set out something that shows you have identified those provisions.