You’ve just had a fantastic experience meeting with an investor and now they’re wanting to do more due diligence. You’ve probably been told that this is a common procedure and that a well designed data room can help speed up fundraising.
You must provide them with a secure online platform to view confidential documents that can be downloaded and accessed from anywhere, even on mobile devices. The aim 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 monitor activity within your VDR. For instance, you can see who is looking at files and for the length of time.
The key is structuring your data room to meet different needs and requirements. For example, you’ll want to include the minimum amount of data needed for stage 1 due diligence (e.g. fit to market, product, financial model and cap table). However, you’ll need provide more granular information for stage 2 due diligence. This includes documents related to the company, securities-related documents material agreements and personnel bios.
You’ll have to decide who has access to your data room, including administrators, regular users and guests. You’ll be required to decide if need to control the version of your data. This lets you monitor modifications to any document and ensures that all team members have access to the latest version. You’ll also need to pick an organization that offers a virtual dataroom solution that meets your business needs. Find a vendor that has auditing capabilities, for example when your company needs to know who has access to what files and for how long.