You’ve just had an amazing meeting with an investor and now they’re keen to do more due diligence. You’ve heard about this being common and that having a well-organized data room can speed up the fundraising process.
You will need to provide a secure online location where they can view confidential documents. These documents can be accessed from anywhere and downloaded, including mobile devices. The aim is to facilitate a quick transparent and secure review of key due diligence documents for investors who are looking to invest. You can also track the activity in your VDR. For instance you can determine who is viewing files and for the length of time.
It is essential to organize your dataroom in a way that it can meet different requirements and demands. For example, you’ll want to include the minimum amount of data needed for stage 1 due diligence (e.g., product-market fit financial model, cap table). You’ll be required to provide more comprehensive information for stage 2 due diligence. This includes company documents, securities related documents, material agreements and bios of the staff.
You’ll need to decide who will have access to your data space, including administrators, regular users and guests. You’ll be required to decide if require version control. This lets you keep track of modifications to any document and ensures that all team members are able to access the most recent version. Finally, you’ll need to select a company that offers an online data room service that is tailored to your business needs. Find a company that has auditing capabilities, for example when your company needs to know who has access to the files and how long they’re.
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