How to organise your due diligence folder or dataroom before seeking investment

Written by Snowball Effect · Published on Tue, 30 March 2021

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Unsure what a due diligence folder or virtual dataroom is, let alone what to include in one? Since launching Snowball Effect in 2014, we’ve completed more than 80 capital raises and worked with companies to develop a compelling due diligence folder for investors.

What is a company due diligence folder?

A due diligence folder is a digital folder containing a series of detailed documents relating to a company. The data contained in this folder typically builds on analysis or information presented in an investment document and provides validation to many of the market claims or growth prospects presented to investors. Investors often wish to see similar information before confirming an investment decision, so storing this in a centralised folder is an easy way to help investors make a decision during a capital raise.

Due diligence folders are often saved in cloud-based storage platforms such as Dropbox or Google Drive. Some companies prefer additional layers of security and privacy layers and opt for an alternative product like Ansarada or Intralinks.

Why does your company need one?

Getting your due diligence folder organised ahead of a capital raise will save businesses hours spent tracking down company information, documents and data requested by each potential investor.

Not only does having all due diligence documentation stored in one place speed up the process, but it also provides investors with an additional level of confidence.

What should a due diligence folder include?

A successful due diligence folder includes quality information that will help answer specific investor questions. They are typically organised so people can quickly find and access documents.

Here’s what you should consider adding to your due diligence folder when raising capital:

Company Information & Capitalisation

  • List the company's officers, their titles, and contact details

  • Include a spreadsheet copy of the company's current capitalisation table

  • Include copies of shareholders' agreements and stock purchase agreements

  • Include a copy of the company’s stock plan or equity incentive plan

Company Documents

  • Include copies of the company’s Certificate of Incorporation

  • Include copies of the company’s constitution

  • Include copies of relevant company documents such as share transfers, share certificates, meeting minutes, and deeds agreements

Financial Documents

  • Include details of any business loans

Financial Statements

  • Cashflow statements

  • Cashflow forecasts

  • Profit and loss statement

  • Balance sheet

  • Tax returns from the last three financial years

Intellectual Property (IP)

  • Include a list of the company’s products

  • Include copies of all executed IP assignment agreements, license agreements and royalty agreements

  • Include details on any third-party involvement in IP development

Other

  • Include an organisational chart of employees

  • Include documentation of market size and current commercial opportunities

  • Include details on insurance and leases

  • Include details of supplier and manufacturing agreements

Creating a great due diligence folder can make a big difference to your capital raising experience and chances of success. When a company raises capital with Snowball Effect, we make sure the right information is available to the right investors at the right time.


Are you interested in learning more about raising capital for your business? Our team is happy to answer any questions and can be contacted at [email protected] or by calling 0800 SNOWBALL