What goes into a data room

A data room is simply the organised set of documents an investor reads before wiring money. It decides very little about whether you get a term sheet, and a great deal about how long the weeks after it take — and a long, disorganised diligence is read, fairly or not, as a signal about how the company is run.

Build it before the first investor asks. Assembling it under time pressure, while also running the company and the process, is where founders lose momentum they cannot get back.

1. Corporate and statutory

• Certificate of incorporation, memorandum and articles of association.
• Board and shareholder resolutions, and the statutory registers.
• Annual filings, and any change of name, address or objects.
• Licences and registrations the business needs to operate.

2. Capitalisation

• A fully diluted cap table — every instrument that can become a share, not only shares already issued.
• Every convertible, note or safe still outstanding, with its cap and discount.
• Share certificates, transfer records and the full history of allotments.
• The ESOP: the scheme, the pool size, grants made, vested and unvested.
• Any prior shareholders' agreement still in force.

3. Financials

• Audited financial statements for every year they exist.
• Monthly management accounts, ideally three years, in one consistent format.
• Bank statements that reconcile to those accounts.
• GST and TDS filings, and income tax returns.
• The model, with its assumptions visible rather than hard-coded.
• A short revenue recognition note, if there is anything about the way you book revenue an outsider would not guess.

4. Commercial

• Material customer contracts, and the standard terms behind the rest.
• Supplier and manufacturing agreements, with any exclusivity flagged.
• Channel, distribution and marketplace agreements.
• Revenue concentration — the top ten customers as a share of the total.
• Cohort or repeat-purchase data, if you have it.

5. Intellectual property

• Trade marks, filed and registered, with their status.
• Patents and designs, if any.
• Domains, and who owns the registrar account.
• IP assignments from every founder, employee and contractor.

That last line is the single most common gap at this size. Code or brand work done by an early freelancer, with no assignment signed, is owned by the freelancer — not by the company — and it will be found.

6. People

• Founder employment agreements, with vesting.
• The employee list with roles, cost and start dates.
• Standard employment contract and the policy set.
• PF, ESI and gratuity compliance.
• Any consultant or advisor arrangement, especially ones paid in equity.

7. Legal and compliance

• Any litigation, notice or dispute, live or threatened.
• Regulatory correspondence.
• Insurance policies.
• Related-party transactions, set out plainly.

What actually holds diligence up

Almost never the business. Four things, in order of how often they appear:

• Paperwork from the first two years — unsigned founder agreements, a share transfer agreed over email and never papered, resolutions that were never passed.
• Missing IP assignments from early contractors.
• Management accounts that do not reconcile to the bank or to the filings.
• A cap table that does not match the statutory registers.

All four are fixable. All four take far longer to fix under an exclusivity clock than they do six months earlier.

How to organise it

Numbered top-level folders matching the seven headings above. One index sheet listing every document and where it is. Consistent file names carrying the date. No loose files at the root, and no folder called Misc. Keep a log of who was given access and when — you will want it later, and some investors will ask.

What to hold back until there is a term sheet

Sharing everything with everyone on the first call is not diligence, it is a leak. Named customer contracts, personal data, salaries attached to names and detailed supplier pricing can reasonably wait until a term sheet is signed. Early on, aggregate it: concentration as a percentage rather than a customer list, payroll as a total rather than a schedule.