Chapter 6
Data Room & DDQ
Building Your LP Data Room & DDQ
ILPA DDQ Framework: Mapping to LP expectations
Track Record Attribution: How to tell a credible story with limited experience
If you’re a first- or second-time GP, your data room is not just a folder; it’s your operating system, how you prove judgment, readiness, and control. LPs want to answer three questions quickly: Is this team credible and governed? Is the strategy executable and evidenced? Are the numbers, policies, and providers trustworthy? The fastest route to “yes” is an ILPA-mapped room that uses familiar formats and standard language, so diligence teams spend time evaluating you, not deciphering your structure.
Below is a full, practical build you can follow today. Where rules or standards matter, I cite primary sources so you and your counsel can validate details immediately.
The Data Room Index with 7 Core Sections, ILPA-mapped
00 - Executive Summary
Purpose: Give an allocator enough context in five minutes to decide whether to engage further.
Include:
- One-pager that crisply states your thesis (“Why you / Why now / Why this strategy”), target size and hard cap, check size and target ownership, reserves, and headline terms (management fee, carry, hurdle if any, GP commit). Use ILPA vocabulary for fee and waterfall displays to reduce translation friction.
- Team tile with headshots, roles, decision rights (who can sign term sheets; who chairs IC), and time allocation (investment vs. platform vs. ops).
- Operating calendar: first-close target, investment period dates, audit timeline, and reporting cadence aligned to ILPA’s reporting template fields. (You can link a one-page “How We Report” commitment here.)
- Quick links to the seven other folders plus a visible change log (date, what changed, owner).
Pass/Fail tells: LPs judge clarity, not hype. “Pass” looks like ILPA-style terms, explicit reserve logic, and an obvious machine from sourcing → underwriting → value creation. “Fail” looks like vague strategy, unclear ownership, or missing dates.
01 - Team & Governance
Purpose: Show who runs the machine, and how decisions and conflicts are controlled.
Include:
- Bios (2–3 paragraphs each) with domain proof, not puffery, and a link to LinkedIn.
- Investment Committee charter: membership, quorum, voting rules, and escalation steps (e.g., tie-break process). Add a sample IC agenda and a redacted IC memo cover page.
- Ownership map: GP/management-company cap table, carry split and vesting, key-person language summary, replacement mechanics.
- Governance matrix: who signs valuations; who resolves conflicts; who approves side letters; who owns LP communications. Mirror ILPA governance language to speed review.
Proof to add: Three CEO or co-investor references with contact permission; a quarter-by-quarter partner time-allocation plan so LPs see capacity is real, not aspirational.
02 - Strategy & Pipeline
Purpose: Demonstrate a repeatable engine, not a set of hopes.
Include:
- Sourcing Engine memo: owned communities, referrers, average monthly warm intros, and conversion rates to first meetings, diligence, and term sheets. (This is where your “unfair access” lives.)
- Underwriting “Day-5 Pack”: the 3-5 questions you always answer before deep work, buyer economics, distribution/partnership path, regulatory or technical chokepoints, plus a one-page risk heatmap with explicit kill-criteria.
- Redacted pipeline with stage tags (sourced / meeting / diligence / IC / term sheet) and next milestones; keep it consistent with your external content to avoid mismatch risk.
- 90-day value-creation playbook: customer councils and partner maps, hiring bench for first GTM roles, pricing or compliance playbooks; who owns them; service-level expectations (e.g., “two customer introductions in 30 days”).
Proof to add: Two anonymized “before/after” notes showing how the playbook changed a company (dates, actions, outcomes). Sophisticated LPs care more about repeatable process than one-off wins.
03 - Track Record
Purpose: Make your judgment auditable, even if your realizations are thin.
Include:
- Attribution schedule listing, per deal: who sourced, who led, who owned diligence streams, voting role, board/observer roles, and the specific post-investment interventions you owned.
- Performance presentation with net and gross shown with equal prominence and clear methodology and dates. The SEC’s Marketing Rule FAQ and enforcement record make two things plain: don’t show gross without net of the same investment with equal salience, and be careful with hypothetical/extracted performance without proper policies and audience controls. Build your compliance footnotes accordingly.
If you’re light on track record: Add a mock portfolio with two to three full IC-caliber memos (one pass, one “would do today”), with buyer calls, unit economics, and kill-criteria. LPs evaluate decision quality more than story quality.
04 - Policies
Purpose: Convert trust into controls LPs can audit.
Include:
- Valuation policy (frequency, methods, price-source hierarchy, treatment of new rounds and down-rounds, who signs, and exception process).
- Conflicts policy: related-party transactions, cross-fund or co-invest deals, expense allocation, and information-barrier mechanics; who adjudicates and how you disclose.
- Side-letter / MFN approach: template clauses, tracking method, and equal-treatment logic aligned to ILPA Principles.
- Cybersecurity overview: roles and governance, third-party vendor risk management (admin, portal, VDR), MFA/SSO policy, encryption standards, backup/DR cadence, data retention, and an incident-response flow with notification windows. (LP ODD teams now expect cyber to be documented, not implied.) Add date of last tabletop exercise. Many professional VDRs support MFA, watermarking, granular permissions, and exportable audit trails – features allocators will ask about.
05 - Service Providers
Purpose: Prove that the work behind the promises will be done by credible partners.
Include:
- Administrator: scope (NAV, capital calls, LP statements, waterfalls, tax/K-1s), deliverable calendar, portal screenshots, and named contacts. Attach SOW or engagement letters with SLAs.
- Auditor & tax: firm names, materiality thresholds, and year-end timelines.
- Legal: formation and fund counsel, jurisdictions, and primary contacts.
- Other (if applicable): depository/custodian (EU), distributor, valuation advisor.
Proof to add: A one-page service-level calendar (capital calls, quarterly packs, audit/tax deadlines) and a clear escalation path. LPs read this as operating maturity.
06 - Legal Docs
Purpose: Let counsel review without friction.
Include:
- PPM/LPA/subscription drafts or a terms sheet if you’re still finalizing; a glossary mapping your terms to ILPA definitions.
- Side-letter template language and MFN note.
- Regulatory exhibits (e.g., Form ADV if applicable; marketing compliance summary if you are a registered adviser).
Proof to add: A “what changed” redline summary if anchor feedback drove edits, this transparency saves cycles.
07 - Reporting Samples
Purpose: Show exactly how you will communicate.
Include:
- Quarterly report mock aligned to the ILPA Reporting Template fields (portfolio table, fees and expenses, valuations, capital activity, narrative commentary). ILPA’s updated Reporting Template v2.0, released in January 2025 and provides the current data model; commit to it in your pitch deck and reproduce it here.
- Sample capital account statement with roll-forward and calls/distributions.
- K-1 layout (US) or the investor tax reporting format relevant to your jurisdictions.
KPI glossary and a production timetable (owners + deadlines) tied to your admin’s SLAs.
Attributable Track Record Storytelling
Angel portfolio
LPs are testing for judgment you own and outcomes you influenced. Split your angel ledger into two blocks, Lead and Participate, then show why you led and what you did after wiring.
What to capture:
- For each deal, start with: “[Company] invested on [date] at the [entry stage]. We took a [lead/follow] role with a [check size], entering at [ownership %] based on a clear thesis edge (e.g., distribution, regulatory insight, or product advantage).”
- Summarize diligence in one line: “We ran 3–5 targeted checks with timestamps, buyer calls, reference interviews, and a v2 financial/model update, to validate unit economics and risks.”
- State what you personally drove: “Interventions we owned (with dates): e.g., 2024-05 introduced payer X; 2024-07 hired first AE; 2024-09 repriced plan A→B.”
- Record measurable results: “Outcome markers (with dates): revenue inflected, pilot signed, next round closed, retention improved, and gross margin expanded.”
- Optional but powerful: “Counterfactual: without our involvement, [specific milestone] would likely not have occurred (or would have taken [X months] longer) due to [reason].”
Evidence to attach in the room: redacted buyer-call notes, the email that set the pivotal intro, the hiring scorecard you used, or a before/after pricing sheet. Keep the narrative causal and dated, LPs want to see a chain of events you initiated, not a victory lap.
Presentation tip: Put the table first, then a short paragraph per lead deal explaining the “why we led” insight and the two most material interventions you executed.
Prior fund experience
When you include prior-firm deals, the burden is to convert platform halo into personal attribution.
Minimum evidence pack per deal:
- Attribution letter or sanctioned email from a partner stating your role across the lifecycle: sourcing, diligence domains (e.g., pricing, regulatory), IC vote, board/observer service, and post-investment work.
- Artifact trail: excerpt of the IC memo you authored, the diligence model or market map with your name/date, board minutes noting your motion or assignment.
- Reference plan: 1-2 pre-cleared calls (former partner, CEO) with topics listed (so LPs know what to ask).
How to present: Start with a one-page Attribution Summary: a table (Deal, Year, Your Role, Decision Rights, Interventions, Outcomes), followed by a second page with links to evidence (letters, memos, board minutes). Use the same headings as your DDQ to keep ODD friction low.
What not to do: avoid vague verbs (“supported,” “involved”). Replace with concrete, auditable verbs (“owned 8-buyer reference process,” “built pricing model used in IC,” “led CRO search; closed candidate”).
Mock portfolio
No realizations? You can still demonstrate the machine. Build 2-3 investment memos that look, feel, and read like your actual IC packets.
Include in each investment memo:
- Deal snapshot: company, space, entry stage, proposed check, target ownership, reserves plan
- Underwriting spine: 3–5 investment questions you must answer (e.g., distribution path, buyer ROI math, regulatory slope)
- Mini unit-economics table: price, gross margin, payback, retention/expansion assumptions with sensitivity cases
- Distribution map (or clinical/payer map, channel partners) with time-to-proof milestones
- Risk heatmap with kill criteria (what turns the card red) and date-stamped tests you’d run in week 1-4
- Pass/Proceed decision: for at least one memo, pass, with a clear causal reason (e.g., CAC curve steepens after cohort 3; regulatory read pushes revenue 18 months)
- Operator call notes: 2-3 redacted buyer notes that show you know how to ask commercial questions
Why LPs like this: it reveals your repeatable process (the questions you always ask, how you get answers, and when you walk). A disciplined “no-go” memo is often more convincing than an airy “winner” story.
Packaging & compliance polish
- Label NET and GROSS performance at the same investment level with equal prominence wherever numbers appear; add a two-paragraph Methodology & Sources note explaining calculations and data cut-offs.
- Time-stamp every artifact (memo date, call dates, intervention dates). LPs trust chronology.
- Use consistent columns, fonts, and file names across the track-record folder so nothing feels ad-hoc.
- Add a one-page “How to read our track record” explainer: role definitions, what “lead” means to you, how you count interventions, and any exclusions.
Do this, and even with a short history you’ll look like what LPs are buying: a team with auditable decision quality, a repeatable diligence engine, and a clear causal imprint on company outcomes.
DDQ Deep Dive
Map your answers to ILPA’s headings
Keep a single Master DDQ.pdf that mirrors ILPA sections – Organization & Governance → Investment Strategy → Process & Risk → Valuation → Fees & Expenses → Liquidity & Lines → Service-Provider Oversight → Compliance, ESG & Cyber, and add a header on every page with document title, version, owner, and last-updated date. In the footer, include cross-references to source policies (e.g., “Valuation Policy §3.2; Conflicts §4.1”). This lets LP teams jump straight to evidence. In the file properties (or front page), add contact for follow-ups and response SLA (e.g., “We respond to RFP questions within 3 business days”).
Emerging asset manager “yellow flags”
Thin operations bench
Upload your admin SOW with a deliverables calendar (capital call, quarterly pack, audit draft/issue dates) and list named individuals (title + email) at admin, audit, and tax. Add a one-page Responsibility Assignment Matrix (RACI) so an LP can see who presses the button for NAV, statements, K-1s, and audit tie-outs.
Unclear valuation cadence
Provide a 2–3 page Valuation Policy: frequency (e.g., quarterly), price-source hierarchy, handling of new rounds/down rounds, review/approval workflow (preparer → reviewer → Valuation Committee/IC), and documentation standard (e.g., memo + cap table + third-party marks). Include one redacted sample valuation memo to prove it’s real.
Conflicts ambiguity
List foreseeable conflicts (co-invest, cross-fund, board seats, broken-deal costs, related-party vendors) and a decision tree: who identifies, who reviews, who approves, and how you disclose deviations. Add your expense allocation matrix (what lives in Fund vs. GP) and the side-letter/MFN tracking process.
Scaling plan
Show a 24-month hiring roadmap tied to AUM or #portfolio companies: trigger points, role descriptions, and budget. Include coverage plans (who steps in) for each critical function until the role is hired.
Key-person risk
Summarize key-person clause; show IC quorum rules and the portfolio coverage plan (e.g., partner X takes over boards A/B; advisor Y covers domain Z) if a key person departs.
Build a response library
Create a DDQ Answer Bank in a spreadsheet or knowledge base. For each ILPA question, keep:
- Approved answer text (100–250 words) in your voice.
- Evidence links (policy section, file name, page number).
- Owner (who updates it) and next review date.
Include pre-approved modules for frequent follow-ups: capital call timing, expense allocation examples, co-invest process, side-letter handling, use of lines of credit, ESG data scope, and cyber incident response. This prevents drift across parallel LP processes and lets new team members answer consistently.
Tip: add short + long versions of answers. Some LP portals cap characters; others want detail. Keep both variants ready.
Versioning strategy
Freeze Master DDQ v1.0 and generate LP-specific PDFs as v1.0-LPName. Maintain a plain-text /00_Executive_Summary/Change_Log.md with date, section, change, reason, owner. Use stable filenames for exhibits and never move folder locations once shared, replace in place to avoid dead links.
Security & Compliance
Pick a VDR with audit-grade controls
Institutional LPs expect 2FA/MFA, granular permissions, watermarking, and exportable access logs. Datasite’s product FAQs emphasize secure governance; Intralinks documents watermarking and IRM controls; Citrix ShareFile’s VDR guidance highlights complete audit trails. Whichever platform you choose, enable access logs and test bulk uploads, versioning, and link stability before inviting LPs.
Good-practice settings:
- Two-tier access: Pre-NDA (00–02 plus a redacted 07 sample); Post-NDA (03–06 and full 07).
- Watermarking on view/download for sensitive files; map file/folder permissions to diligence stages.
- Log exports: schedule a monthly export of activity logs for your compliance archive.
NDA templates and access logging
Use a short, friendly NDA (2-3 pages) that doesn’t slow progress; note in 00 the access stages and who approves upgrades. Keep a simple register of who got access when and by whom it was approved, then rely on the VDR’s audit logs for detail. (Datasite/ShareFile present audit trails as a core feature; Intralinks exposes configurable watermarking and IRM policy.)
Cybersecurity documentation
Include a Cybersecurity Overview that covers:
- Governance: policy owner, training cadence, third-party vendor oversight (admin, auditor, VDR, CRM).
- Controls: SSO/MFA, encryption in transit/at rest, endpoint standards, backup/DR cadence, data retention.
- Incident response: detection, triage, containment, notification timelines, and post-incident review.
- Evidence: date and scope of last tabletop exercise.
(Why this matters: cyber and vendor-risk oversight are persistent diligence themes for private-fund managers in recent examiner priorities and industry guidance; don’t make LPs ask.)
Why ILPA format wins
ILPA has become the common language of institutional diligence: the DDQ standardizes what LPs will ask, the Reporting Template standardizes what you’ll report each quarter, and Principles 3.0 gives you the governance vocabulary LPs expect. If your data room mirrors those three artifacts, consultants and ODD teams can evaluate you faster because nothing needs translating.
In 2025, ILPA released Reporting Template v2.0, the first major refresh since 2016. ILPA states the updated template is intended to replace the 2016 version on a go-forward basis for funds still in their investment period during Q1 2026 or for funds commencing operations on or after January 1, 2026. Concretely, that means emerging asset managers raising now should build samples that match v2.0, not the legacy format.
What changes with v2.0? ILPA’s guidance explains that the new template is part of its Quarterly Reporting Standards Initiative (QRSI), developed through 2024 and released January 2025. It expands data fields and clarifies definitions so LPs can compare fees, expenses, carry and performance across managers with less friction. Several administrators and audit firms have since published implementation notes, underscoring that v2.0 is the format LP ops teams will increasingly expect.
How to make this obvious in your data room:
- State your commitment. In /00 Executive Summary, add a one-page “How We Report” that explicitly commits to ILPA Reporting Template v2.0 starting with first-close quarter, and to the ILPA DDQ structure for diligence responses. Link directly to your /07 Reporting Samples.
- Show the artifacts. In /07 Reporting Samples, include (i) a quarterly report mock populated in v2.0 fields, (ii) a capital account sample, and (iii) your K-1 (or local equivalent) layout. Add ILPA’s Suggested Guidance line-by-line mapping so reviewers see where each number lands.
- Mirror the DDQ. Keep a Master DDQ PDF whose headings follow ILPA’s sections exactly (organization & governance; strategy; process & risk; valuation; fees/expenses; liquidity & lines; service-provider oversight; compliance/ESG/cyber). This lets LPs drop your answers into their systems without reformatting.
- Use ILPA terms in legal/economics. In /06 Legal Docs, include a short glossary mapping your terms to Principles 3.0 language (e.g., waterfall definitions, clawback mechanics, fee offsets). Consistent vocabulary reduces redlines and speeds counsel review.
- Set a timeline. Since ILPA’s own page flags Q1 2026 as the go-forward crossover, add a sentence to your Reporting Commitment noting your adoption date (e.g., “We will report using ILPA v2.0 beginning with the first full quarter after initial close”). That tells LPs you’re aligned with industry timing.
The payoff is practical: v2.0 samples plus an ILPA-ordered DDQ turn your room into a plug-and-play package for consultants and back-office reviewers. You’ll still be judged on strategy and track record, but by speaking ILPA fluently, and proving it with concrete samples, you remove format debates from diligence and keep attention on your edge.
How to Fundraise Your First Fund in 2025
Defining Your Investment Thesis
LP Targeting: Family Offices to Fund-of-Funds
Building Your Sourcing Edge
Running Your Fundraising Process
Fund Structure: 506(b), AIFMD & ELTIF
First Close: Funnel & Metrics
US Marketing Rules & SEC Compliance
The Final Close Checklist
EU Fundraising Routes
LP Reporting & Communication
Building Your LP Data Room & DDQ
Secondaries & Continuation Funds