So you’ve had a fantastic pitching session with an investor and they’re looking to conduct more due diligence. You’ve heard that this is common and that a well-organized data room can help you accelerate the process of fundraising.
It is essential to provide them with a secure online location to review confidential documents that are able to be downloaded and accessed from anywhere, even on mobile devices. The goal is for potential investors to be able access due diligence documents in a safe way, and in a transparent and efficient manner. You can also track the activities within your VDR. For instance you can check who is looking at files and for how long.
It is essential to arrange your dataroom according to different demands and requirements. For instance, you’ll want to include the bare minimum of data needed for stage 1 due diligence (e.g. fit to market, product, financial model and cap table). However, you’ll want to provide more specific details for stage 2 due diligence, which includes documents related to the company, securities-related documents, material agreements and staff bios.
You will need to decide if you want to grant access to your dataroom to regular users, administrators, or guests. You’ll be required to decide if need to control the version of your data. This allows you to monitor changes to any document and ensures that all team members have access to the latest version. Also, you’ll need select a vendor that provides an online data room that meets your specific business needs. For instance, if you need to see who is watching which files and how long, choose an option that provides auditing capabilities.