Almost 60% of failed deals can be traced back to poor due diligence. That statistic comes from a Bain & Company survey of senior executives, and it should terrify anyone preparing to raise capital. The reasons vary: numbers that don’t match the pitch deck, legal issues nobody mentioned, financial records with gaps you could drive a truck through. But the root cause is almost always the same: a data room that wasn’t ready for serious scrutiny.
A data room is a secure digital space where you store everything an investor might want to review before writing a check. Think of it as your company’s complete medical record. When an investor requests access, they’re looking for evidence that your business is what you say it is, that your numbers hold up, and that there are no landmines waiting to explode after the wire transfer.
The diagram at the heart of this guide breaks down a complete data room into three major sections: Company Fundamentals, Traction & Financials, and Product & Brand. Each section contains specific document categories, and each category serves a particular purpose in the due diligence process. Some items are required from day one (marked as early-stage), while others become necessary as you scale (growth-stage). Miss the wrong document at the wrong time, and you’ll watch an interested investor go quiet.
Let’s walk through every section.
Section A: Company Fundamentals
Investors start here. Before they look at revenue numbers or customer contracts, they want to understand what your company is, who runs it, and whether it’s legally organized in a way that won’t create problems down the road. If this section is messy, they’ll assume everything else is too.
1. Company Snapshot
One Pager Your company on a single page. Problem you’re solving, solution you’ve built, market size, traction highlights, team, and what you’re raising. Investors review these in about five minutes. If yours doesn’t hook them immediately, they’re unlikely to open anything else. Keep it tight, lead with what makes you different, and make sure every number you include can be backed up by documents elsewhere in the data room.
Pitch Deck Your story told visually. It expands on the one pager with slides covering your thesis, product vision, how you stack up against competitors, business model, traction, team, and use of funds. Most decks run 15 to 20 slides. The critical thing here is consistency: if your deck says you have $2M in ARR but your financials show $1.5M, that inconsistency will tank the deal faster than almost any other mistake.
Case Study A detailed example of how a customer uses your product and the results they’ve achieved. The best case studies include specific metrics: revenue generated, time saved, costs reduced. They move you from theory to proof. Early-stage companies might have one. Growth-stage companies should have several across different customer segments.
Long-Term Vision More important at growth stage. Where are you headed in five to ten years? IPO? Acquisition? Category dominance? Investors want to know whether their return expectations align with your plans.
2. Team
Investors bet on people as much as products, especially at early stages. The team section proves you have the right humans to build the thing.
Team Bios Background on founders and key executives. Education, previous companies, relevant experience, notable achievements. Investors are looking for founder-market fit. A first-time founder building fintech with no financial services background will face more questions than someone who spent a decade at Goldman Sachs.
Employment & ESOP Agreements Confirm that key employees are actually employed (not just helping out), that IP assignment clauses are in place, and that there’s an equity incentive plan to retain talent. If your CTO has no vesting schedule and could walk away with their shares tomorrow, that’s a problem.
Advisors List of formal advisors with their credentials and what they contribute. Good advisors mean smart, experienced people believe in your company enough to lend their reputation. Investors often know these people personally and may reach out to them as informal references.
Org Design How your company is structured. Reporting lines, departments, team sizes. More important at growth stage when organizational complexity increases. Investors want to see you’re building a company that can scale, not just a product with people attached to it.
Hiring Plan Who you plan to hire with the money you’re raising, in what order, and why. A vague hiring plan suggests you don’t really know what you need. A detailed plan with roles, timing, and rationale suggests you’ve thought about how to deploy capital.
3. Company Documents
The legal backbone of your corporate existence. Missing or sloppy documents here will delay or kill deals.
Incorporation & Bylaws Your certificate of incorporation and bylaws. These establish that your company legally exists and define how it operates. Delaware C-corps are the standard for venture-backed startups. If you’re incorporated elsewhere or structured differently, be prepared to explain why.
Shareholder Agreements Agreements between existing shareholders covering voting rights, transfer restrictions, and drag-along provisions. These reveal the existing power dynamics in your company. Investors need to understand what rights they’ll have and what existing commitments might affect their investment.
Board Meeting Minutes Records of board meetings and major decisions. If you’ve been making significant decisions without proper board approval or documentation, that’s a red flag. Consistent, well-documented board minutes tell investors you run your company professionally.
Org Chart A visual representation of your company structure. Simple at early stage, more detailed as you grow. Helps investors quickly understand who does what.
4. Investment Documents
The story of who has invested in your company, on what terms, and what the current ownership structure looks like.
Cap Table The capitalization table: who owns how much of your company. Founders, employees with equity, investors, option pool. One of the most scrutinized documents in any data room. Investors use it to understand their potential ownership percentage, how much dilution has already occurred, and whether the founder equity is still substantial enough to keep everyone motivated. A messy cap table with unclear ownership or missing documentation is a serious warning sign.
SAFE / Convertible Notes If you’ve raised money using SAFEs or convertible notes, include all of them. These specify the terms under which early investment converts to equity. Investors need to model what happens when these instruments convert to understand the actual post-money ownership. Outstanding convertible instruments that aren’t clearly documented can create nasty surprises during the final stages of a deal.
Prior Round Materials Term sheets, investment agreements, and closing documents from previous funding rounds. These reveal the terms your existing investors received: liquidation preferences, anti-dilution provisions, pro-rata rights, board seats. New investors need to understand how their investment will stack up against these existing commitments.
Investor Updates Regular updates you’ve sent to existing investors. Surprisingly revealing. They show how you communicate, whether you hit the milestones you set for yourself, and how you handle challenges. Consistent, honest investor updates suggest operational discipline. Sporadic or overly rosy updates raise questions about transparency.
5. Legal
Legal documents protect your company and reveal potential liabilities. Incomplete legal documentation is one of the top reasons deals fall apart during diligence.
IP & Trademarks Patents, trademarks, copyrights, and any other intellectual property your company owns. For technology companies especially, IP is often the core asset. Investors need to verify that you actually own what you say you own, that former employers don’t have claims, and that your IP is properly protected. IP disputes have killed countless deals.
Company Policies (Privacy, HR, etc.) Internal policies covering data privacy, employment practices, code of conduct. More important at growth stage when regulatory scrutiny increases. For companies handling customer data, privacy policies aren’t optional: they’re legally required and investors will verify they exist.
NDAs Non-disclosure agreements with employees, contractors, and partners. These protect your confidential information and trade secrets. If you’ve been sharing sensitive information without NDAs in place, you may have inadvertently given up protections you’ll later wish you had.
Tech & Security Agreements Agreements related to your technology infrastructure: cloud service agreements, software licenses, security certifications. These affect your cost structure and operational risk. If your entire business runs on AWS and your agreement expires in six months with no renewal terms, that’s worth knowing.
Insurance Directors and officers insurance, general liability, errors and omissions, cyber insurance. Investors want to know you’re adequately covered. Growth-stage companies should have comprehensive coverage; early-stage companies should at least have D&O insurance in place.
Litigation Docs Any pending or past lawsuits, legal disputes, or regulatory actions. Undisclosed litigation is one of the biggest red flags in due diligence. If you’re involved in legal disputes, disclose them upfront. Investors will find out eventually, and discovering hidden litigation during diligence will torpedo trust immediately.
Section B: Traction & Financials
Section A told investors what you’re building and who’s building it. This section proves it actually works and that the economics make sense.
6. Customers
Customer Contracts Actual signed agreements with customers. These verify that your revenue is real and show the terms under which customers pay you. Investors will review contract terms, length, renewal provisions, and any unusual clauses. If more than 25% of your revenue comes from a single customer, expect detailed questions about that relationship.
Sales Pipeline Your current sales pipeline: prospects at each stage, deal sizes, expected close dates. A healthy pipeline suggests future growth. An empty pipeline despite a sales team suggests execution problems.
Testimonials Quotes from happy customers. Social proof that real people value what you’ve built. Investors may ask to speak directly with reference customers, so make sure the testimonials reflect relationships that can withstand a reference call.
Cohort Reports Analysis of customer behavior by when they joined. Monthly retention cohorts showing that customers who joined a year ago are still active and spending more is powerful evidence of product-market fit. Declining cohorts are a warning sign.
Customer KPIs & Analytics Key metrics about your customer base: acquisition cost, lifetime value, churn rate, net revenue retention, average contract value. The specific metrics vary by business model, but investors want to see that you track these numbers rigorously and that the trends are moving in the right direction.
Market Research Research on your target market: size, growth rate, competitive dynamics, customer needs. Claims about market size need to be backed by credible sources. Original research you’ve conducted on customer needs can be particularly valuable.
Success Stories Detailed stories of customer wins, often more comprehensive than case studies. The customer’s journey from initial contact through implementation to achieving results.
7. Financials
Financial documentation is where serious scrutiny happens. Numbers that don’t reconcile across statements or that show unexplained swings will trigger immediate concerns. Investors are looking for accuracy, consistency, and realistic projections.
Financial Model, Actuals & Budget Your working financial model showing historical performance, current budget, and projections. Investors will spend the most time here. They’ll test your assumptions, challenge your growth rates, and look for internal consistency. Build one comprehensive model with linked tabs rather than multiple spreadsheets that might contradict each other.
Financial Projections Detailed forecasts for the next three to five years. Include your assumptions and be prepared to defend them. Overly optimistic projections that can’t be justified by historical performance or market analysis will damage your credibility. Slightly conservative projections that you consistently beat are more impressive than hockey-stick charts you’ve never come close to achieving.
Tax Filings & Compliance Tax returns and documentation of tax compliance. Verifies that your financial reporting aligns with what you’ve told the government. Discrepancies between your financials and tax filings need explanation. Outstanding tax liabilities or compliance issues can be deal-breakers.
Financials (Past 1-3 Years) Income statements, balance sheets, and cash flow statements for your operating history. These should cover the last three years or since inception, whichever is shorter. Growth-stage companies may have audited financials; early-stage companies will have internally prepared statements. Either way, they need to be accurate and complete.
Unit Economics The fundamental economics of your business at the unit level: what it costs to acquire a customer, what that customer is worth over time, gross margin per transaction or subscription. Strong unit economics prove your business model can scale profitably. Weak unit economics raise questions about whether you’ll ever make money, regardless of revenue growth.
8. GTM & Revenue
Go-to-market documentation: how you plan to acquire customers and generate revenue at scale.
GTM Strategy Deck Your plan for reaching and acquiring customers. Covers channels, tactics, partnerships, and how everything fits together. Investors want to see that you’ve thought about how you’ll grow beyond your current customer base.
Pricing & Revenue Model How you make money and how much you charge. Should explain your pricing logic, not just list prices. Why do you charge what you charge? How does pricing compare to competitors? What’s the path to increasing average revenue per customer?
ICP & Market Segmentation Your ideal customer profile and how you segment your market. A clear ICP helps investors evaluate whether your sales and marketing spending is focused on the right targets.
Sales Playbook Your documented sales process: how leads are qualified, how deals progress through stages, talk tracks, objection handling, closing techniques. A mature playbook suggests you can onboard new salespeople and scale your sales organization. No playbook suggests the sales process lives entirely in founders’ heads.
Customer Journey How customers move from awareness through purchase to becoming advocates. Particularly relevant for companies with longer sales cycles or complex products.
Section C: Product & Brand
What you’ve built and how you present it to the world.
9. Product
Demo Video A recorded demonstration of your product. Lets investors see your product in action without scheduling a live demo. Keep it concise, focused on core functionality and value. Update it whenever the product changes significantly.
Roadmap & Vision Where your product is headed. Near-term roadmap (next 6-12 months) and longer-term vision (2-3 years). Investors want to understand what you’ll build with their money and how the product will evolve to capture more of the market.
Usage & Engagement Metrics Data on how customers actually use your product. Daily active users, session length, feature adoption, whatever metrics matter most for your product type. High engagement supports claims about product-market fit. Low engagement raises questions about whether customers really need what you’re building.
Tech Stack Overview The technical architecture of your product. Languages, frameworks, infrastructure, key dependencies. Investors with technical backgrounds will review this to assess technical debt, scalability, and whether you’ve made reasonable technology choices.
Security Docs Documentation of your security practices, certifications, and compliance. SOC 2 reports, penetration test results, security policies. Increasingly important as enterprise customers demand evidence of security practices before signing contracts.
10. Press & Brand Assets
Press Kit & Media Mentions Collection of press coverage, media mentions, and a press kit for future media outreach. Strong press coverage suggests the market is paying attention.
Brand Assets Logos, brand guidelines, and visual identity materials. Shows you’ve invested in professional presentation. Also practical: investors may need these for portfolio pages or announcements.
Awards & Recognition Industry awards, analyst recognition, “best of” lists. Third-party validation that people outside your company and customer base consider your work notable.
Early-Stage vs. Growth-Stage Requirements
Not every document is equally important at every stage. The diagram distinguishes between early-stage requirements (pre-seed, seed, angel-backed) and growth-stage requirements (Series A and beyond).
Early-stage companies should prioritize: one pager, pitch deck, team bios, incorporation documents, cap table, basic financials, customer contracts, and a demo. Investors at this stage are betting primarily on the team and the market opportunity. They need enough documentation to verify the basics but won’t expect the same level of detail as a Series B investor.
Growth-stage companies need everything. The long-term vision document, detailed org design, comprehensive legal documentation, audited financials, cohort analysis, and formal sales playbooks all become standard expectations. At this stage, investors are writing larger checks and need more thorough diligence to justify the investment.
The most common mistake is showing up underprepared for the stage you’re at. An early-stage founder with a perfect data room looks unusually professional. A growth-stage company with gaps in basic documentation looks sloppy.
Common Mistakes That Kill Deals
- Inconsistent numbers across documents. Your pitch deck says one thing, your financial model says another, your tax filings say something else. Before sharing your data room, cross-check every number that appears in multiple places.
- Undisclosed liabilities. Hidden litigation, unreported debt, tax problems, ownership disputes. Investors will find these during diligence. When they do, the deal is usually dead. Disclose problems upfront. Investors can often work around known issues. They can’t work around deception.
- Missing documents. Requests for basic documents that get responses like “we’re still working on that” or “let me track that down” tell investors you’re disorganized. Have your data room complete before you start conversations.
- Customer concentration risk without explanation. If 30% of your revenue comes from one customer, acknowledge it and explain your plan to diversify. Pretending it’s not a risk when investors can see it clearly in your customer contracts damages credibility.
- Sloppy legal documentation. Missing IP assignments, incomplete employment agreements, unsigned shareholder documents. Legal sloppiness creates liability and makes investors wonder what else is being mismanaged.
Putting It All Together
A data room is your company’s story told through evidence. Every document either supports the narrative you’ve pitched or contradicts it. Investors review data rooms looking for reasons to invest and for red flags that suggest they shouldn’t.
The best data rooms are organized logically, complete for the company’s stage, and internally consistent. They answer questions before investors have to ask them.
The work you put into your data room reflects the work you’ve put into your company. Build it before you need it. Update it continuously. When the right investor comes along, you’ll be ready.
