Brian Nichols is the co-founder of Angel Squad, a community where you’ll learn how to angel invest and get a chance to invest as little as $1k into Hustle Fund's top performing early-stage startups

You just got a verbal yes from an angel investor. Congrats. Now comes the part most founders forget about: actually getting the money into your bank account.

Here's what happens next. Your investor will ask for documents. Lots of them. And depending on how prepared you are, this process either takes three days or three months. I've seen fundraising rounds stall for months because founders didn't have their data room sorted out.

What Goes in a Data Room

At the earliest stages, you don't need anything fancy. A simple Dropbox or Google Drive folder works fine. But you do need the basics organized and ready to go.

Super early startups need just the essentials: incorporation documents, bylaws, and your cap table. That's it. You're showing investors you're a legitimate company with actual structure.

As you mature into pre-seed and seed stages, the list gets longer. You'll add financial projections, any client contracts you have, board minutes if you're having those meetings, founder stock purchase agreements, your option plan and stock option agreements, and your 409A valuation report.

By Series A, investors expect a proper data room with everything labeled, organized, and easy to find.

What Investors Actually Look For

Hustle Fund investor, Elizabeth Yin doesn't always dig through every document when founders send her a data room link. What she does do is look at how it's organized.

There's this quote she loves: "How you do anything is how you do everything." The way you keep track of documents reflects how you run your company. It sounds harsh, but it's proven true hundreds of times.

Impressive companies have everything filed correctly. All important documents are included. Everything is clearly labeled and searchable. You can find what you need in 30 seconds.

Messy companies have nothing organized. Files are missing. Documents aren't properly labeled. You spend 10 minutes hunting for a single PDF.

Sure, investors might verify some of your assets. But what matters more is seeing how you set up your Dropbox folder. Because how you do anything is how you do everything.

If You Don't Have a Data Room Yet

Early on, not having a complete data room isn't a dealbreaker. But as your company grows, there are real consequences.

We know a founder whose fundraising round stalled for months because his data room was missing half the required documents. Investors wanted to move forward, but they legally couldn't wire money without certain paperwork. Every week that passed, momentum died a little more.

The Actual Checklist

As a best practice, Hustle Fund sends all portfolio companies a checklist of items before we wire money. Here's what most angel investors will ask for:

Your certificate of incorporation and bylaws prove your company exists. Board consents show governance decisions were made properly. Founder stock purchase agreements demonstrate everyone has skin in the game with proper vesting. Your option plan shows how you're incentivizing employees. The 409A valuation report sets the strike price for options. And your cap table should be accurate, up to date, and make sense.

Hustle Fund specifically checks that founders have vesting in place, a stock plan set up, and a cap table that adds up correctly. Elizabeth personally asks for incorporation papers to verify her investment goes to the company, not someone's personal account.

Background Checks and Side Letters

Don't be surprised if investors run a background check. They want to know if you have a criminal background or active lawsuits that could put the business at risk.

Many VCs also run OFAC background checks through the Treasury Department database. They're making sure you're not on any terrorism watch lists or sanctions lists. If you have a common name, this might trigger a false positive. Just clear it up quickly.

You'll probably also see side letters. These are documents outside your SAFE or convertible note that outline additional rights. The two most common are pro rata rights, which let the VC invest more in future rounds to maintain their ownership percentage, and most favored nation rights, which let previous investors reset their valuation if later investors negotiate a lower cap.

Review everything with an attorney before you sign.

The Wire Details Phone Call

This sounds paranoid, but you actually need to call your investor to confirm wire details. Texting doesn't cut it.

Fraud happens. Scams happen. Someone could intercept an email and change banking details. Hopping on the phone to verify your routing and account number makes sure the money goes to the right place.

Just do it.

Starting Your Data Room Today

The best time to start organizing your data room is right now. Not when an investor asks for it. Not when you're about to close a round. Now.

Create a simple folder structure. Label everything clearly. Keep it updated as you add new documents. Future you will be grateful you did this early.

Your data room might seem like busywork compared to building product or talking to customers. But it's the difference between closing a round in days versus months. It's worth the effort.

If you're ready to raise capital and want to connect with angel investors who understand early-stage companies, Angel Squad provides access to vetted opportunities and a community of investors who've been exactly where you are. The network you build before you need money is the network that writes checks when you do.