What Startups Need (And Don’t Need) In Their Series A Data Room

By Lacey Wisdom, Tim Wang, and Nihal Mehta

Here at Eniac Ventures, we’re getting ready for the fall to be into one of the busiest periods ever for Series A funding — and that’s after a record-setting first half of the year.

Like any seed investor, we want to see our companies find product-market fit and successfully raise their Series A. In fact, it’s something we’ve been focused on for years.

One of the most reliable tools for converting to an A? A good data room.

If you’re just starting a company, you might only have the vaguest sense what a data room is, who it’s for, and what should be included. This is fine! In the very earliest stages of your startup’s lifecycle, you probably don’t need one.

But at some point — most likely when you go out to raise a Series A — investors will expect you to have one, because they want a one-stop shop to easily access all the information required for their due diligence.

We know that creating a data room can seem like a daunting task. If you’re a founder who’s struggling, we wrote this post for you. Our hope is that you can spend less time worrying about the construction of the room and more time actually writing and preparing the content.

Before we get into the details of what to include, you need to decide what platform you’re actually using to build your room. Recently, we’ve seen a few of our portfolio companies successfully use Notion instead of a traditional data room such as a Google Drive, and we’ve gone ahead and created a data room template in Notion that anyone can duplicate.

We think Notion provides a few advantages such as controlling the narrative around your performance and data; making it easy to embed key documents such as your deck, financials, and org structure directly into that narrative using native applications; and accelerating the due diligence process by allowing potential investors to get past the background and dive directly into the meat of what they care about.

This can be particularly important if you have a complex story or business model. The written format allows you to provide potential investors with an extensive write-up without having to use your limited time in every Zoom meeting with various VCs.

Regardless of platform, there are a few standard components that every investor will want to see — a company overview, deck, and financial model. There should also be data around the KPIs that you track to monitor the health and growth of the business. Absent a fulsome financial history, investors will look toward KPIs to gauge the growth prospects of the business as well as your acumen as a founder in tracking and impacting the key drivers of the business. The data room should also have contact information, an org chart, and information on your team and current advisors.

Some other possibilities: Most data rooms benefit from having a summary of terms, usually in the form of a short document. If your product can be demoed, the data room is also a great place to upload a video or link to that demo. This can also be a good place to showcase user feedback with a document highlighting comments from existing customers or clients in pilots. You can compile links to any press the company has received, including news, interviews, and accolades. And you can include additional components based on the due diligence checklists of potential investors.

One thing to keep in mind is that while you want to share your story and your data with your investors, you don’t need to over share.

Create charts of KPIs — downloads, DAUs, ARR, sales conversion rates, customer retention, paying customer conversion, and so on — that show off your story. Share a sanitized financial model that’s more high level than the one used for internal purposes, and that prioritizes readability.

Remember that at this stage, most investors are looking for reasons to pass. So curate the data for them, rather dumping them with information. Ultimately, you want to strike a balance between transparency and sharing too much.

And as mentioned above, we wanted to help help you get started quickly, by creating a template in Notion that you can duplicate. Of course, you’ve got to replace all that filler text yourself, and once you’ve done that, you should set permissions to control access to any sensitive information.

If you’ve got other questions about your data room, you can email us at advice@eniac.vc and we might answer as part of our Ask a Seed VC column. Good luck to all the founders trying to raise funding!

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