You’ve had a successful meeting with an investor and they’re interested in doing more due diligence. You’ve heard about this being common and that having a well-organized data room can help you accelerate the process of fundraising.
You’ll need to provide a secure online space where people can access confidential documents. The documents can be accessed from any location and downloaded, even mobile devices. The goal is to allow for a fast, transparent and secure review of the most important due diligence documents for investors who are looking to invest. You can also monitor the activity within your VDR by determining who is looking at which files and for how long.
It is important to structure your dataroom to meet different requirements and demands. For instance, you’ll want to include the minimum of data needed for stage 1 due diligence (e.g., product-market fit, financial model and cap table). However, you’ll need provide more granular details for stage 2 due diligence, which includes documents for the company, documents related to securities materials agreements, as well as staff bios.
You’ll need to decide who has access to your data room, such as regular users, administrators and guests. You’ll have to decide if want version control. This allows you to keep track of modifications made to any document and ensures that everyone in the team have access to the latest version. You’ll also need to select an organization that offers an online dataroom that will meet your business’s needs. Find a vendor with auditing capabilities, for instance for your business if you need to know who is viewing what files and for how long they’re.