# Data rooms and additional documents to prepare for seed fundraising

**Author:** None
**Type:** Essay
**URL:** https://www.ycombinator.com/library/Da-data-rooms-and-additional-documents-to-prepare-for-seed-fundraising


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## **What is a data room?**

A “data room” is just a fancy term for a collection of documents that you can easily share with investors.  Data Rooms
are a commonly used tool in later stage funding rounds (Series A+) because they cut down on the back-and-forth of
investors asking for materials and companies supplying them.

## **What tool would I use to make a data room?**

A data room, especially at the seed / Series A stage, is typically just a Google Drive or Dropbox folder.  To keep track
of what you sent to whom, you can simply create a different folder for each investor.

Docsend also has a [data room product](https://www.docsend.com/features/virtual-data-room/) some companies use.  There
are many enterprise-class data room products, but those are overkill for this purpose.

## **Should I make a data room?**

Most companies do not need a data room for seed stage fundraising.  This would be overkill for your typical early stage
software company.  There are a couple of cases where it could make sense:

  - You're a hard-tech/biotech/life science company
  - You have a lot of traction and are planning to raise a large round from large investors

If you’re not sure if it makes sense to prepare a data room, it’s best to just not bother with doing so upfront.  

If an investor asks you for one, it’s perfectly fine to ask them for what documents they are asking for specifically.
They’ll then either suggest a few documents, which you can send through email, or they’ll send you an extensive list
that mostly applies to later stage companies. Look through the list and send them what you find relevant for your stage
of the conversation. 

If you find that investors are requesting a lot of the same documents, you can make a data room then and use the
requests you’ve gotten to inform what you put in it.

## **What should go in my data room?**

Here is a list of materials to consider putting in a data room - only some of these will be relevant for any particular
company.

### Business materials

  - If you have major enterprise deals (contracts, pilots, LOIs, partnerships), the signed documents of those deals
  - Historical financial statements (typically monthly showing a breakdown of revenue and costs)
  - Financial projections (typically a model in Excel or Google spreadsheets)
  - More detailed metrics than are in your main investor deck: such as unit economic breakdowns, retention and
    engagement data, sales pipelines, CAC/LTV analysis, customer acquisition source breakdowns.  These can also go in an
    Appendix section on your investor deck.

### Legal materials (it’s often best to wait until someone asks for this information)

  - Certificate of incorporation and bylaws
  - Your cap table (breakdown of the equity ownership in your company including SAFE holders / investors)
  - Employee agreements 
  - Copies of signed SAFEs and any other investment documents
  - If you have a considerable number of employees, an org chart

### Materials for hard-tech / biotech / life sciences companies

Each of the following headers can be used as folder titles, and then the subjects listed below each header are documents
that you can provide. Please note, you often don’t want to give them everything upfront, so ask us if you’re unsure if a
certain piece of information is relevant to your stage of conversation.

Intellectual Property 

  - All published patents
  - A document that lists provisional patents that are currently pending, and, if needed, what core features of your
    product they cover

Clinical and Experimental data

  - Reports from completed clinical trials
  - Protocols of ongoing trials
  - A document that summarizes all of your trials to date in one place
  - A document that summarizes your upcoming clinical trial strategy
  - Detailed experimental data (if you have it)

Regulatory Information

  - Any regulatory approvals that you have received so far
  - Any regulatory plans that you have gotten from outside consultants

  
Product/technology/science Information

  - An FAQ addressing common questions investors have about your technology
  - A document explaining in more detail how your technology works that’s written to be easy for investors to understand
    (careful about writing anything down not already covered in patents)
  - Publications (both by you and potentially relevant ones by others. It’s often helpful to have another document that
    summarizes/categorizes the most relevant papers)

Other

  - A detailed budget showing the costs to get to your next milestones (Operating/hiring plan)

