You’ve had a successful meeting with an investor and they’re interested in doing additional due diligence. You’ve probably heard that this is a common procedure and that a well prepared data room can make fundraising easier.
You need to provide them with a secure, online location to review confidential documents that are able to be downloaded and accessed from any location, including mobile devices. The aim is to allow for a fast and secure, transparent and safe review of key due diligence documents for potential investors. You can also monitor activity within your VDR by determining who is examining which files and for how long.
It is essential to arrange your dataroom according to different requirements and needs. You’ll want to include only the necessary information for stage 1 due-diligence (e.g. product-market fit and financial model). However, you’ll need include more specific details for stage 2 due diligence, which includes company documents, securities-related docs materials agreements, as well as staff bios.
You’ll need to determine who will have access to your data room, such as regular users, administrators and guests. You’ll have to decide if need to have a version control. This lets you monitor changes to any document and ensures that everyone in the team are able to access the most recent version. In the end, you’ll need select a vendor who offers an online data room that meets your specific requirements for your business. Find a company that has auditing capabilities for instance for your business if you need to know who is viewing the files and how long.