When Andy Panos, COO of Cloudbreak, was seeking a Series A round for the company, he started a data room. And inside that data room was corporate, legal, finance, marketing, contracts and other relevant information that was necessary for people to examine as they were looking to invest in the company.
As the company would talk to different investors, those who were interested beyond what they learned from the pitch deck were asked to sign an NDA and then invited into the data room the company had prepared.
Never really being in the deal space before, Panos got help building the data room and going to market from business partners who knew deal making. When interested parties got the invite, they were impressed.
"From that point they go, 'Oh, you got a data room already set up? So, immediately the bankers start to think these guys got their stuff together and we're anxious to see what's in that data room, we're going to start downloading the stuff," Panos says.
After a successful Series A, Panos figured since the company had already done all the hard work of assembling the data room and it looked great, that he'd just keep it up to date. Doing so gave them some additional benefits. For instance, he says even when the company started looking do some debt financing and needed some information, he'd send them to the data room.
"I still have a data room up, as a matter of fact," he says. "I refresh the financials in it, I do all the different things because you just never know when you're going to need to have some information on there. And it really makes a big difference when you sit down and you're sitting across from some bankers and you say to them, sign the NDA and we'll let you into our data room."
The data room needs to be regularly updated, he says, which isn't that difficult. It just means adding updated financials, new contracts for top 20 customers, marketing materials.
"Keep it fresh and when people ask for it, you've got it," he says.
Panos, along with U.S. Bank Market President Steve Bennett, Nottingham Spirk Director Katherine Hill Ritchie and Armada Waste Ohio President Robert Smith spoke at the recent Smart Business Columbus Dealmakers Conference about staying prepared for a transaction. Hit play on the video above to catch the full conversation.