How Do You Build a Data Room for Due Diligence?

So you’ve had a great meeting with an investor, and they’re interested in doing more due diligence. You’ve likely been told that this is a common practice and that having a properly created data room can make fundraising easier.

You’ll need to provide a secure location online where people can access confidential documents. The documents can be accessed from any location and downloaded, including mobile devices. The goal is for potential investors to be able to access due diligence documents in a secure, efficient and transparent manner. You can also track the activity in your VDR. For instance you can track who is viewing the files and for Data room the length of time.

It is important to structure your dataroom according to different requirements and demands. You’ll need to include only the necessary information for stage 1 due diligence (e.g. product-market fit and financial model). You’ll be required to provide more comprehensive details for stage 2 of due diligence. This includes documents for the company, securities-related documents, material agreements, and bios of the staff.

You’ll have to decide if you want to open your dataroom to regular users, administrators or guests. You’ll be required to decide if want version control. This lets you keep track of any modifications made to any document and ensures that everyone in the team have access to the latest version. Additionally, you’ll have to select a vendor who offers the option of a virtual data room that meets your specific requirements for your business. Find a vendor that has auditing capabilities, for instance, if your business needs to know who has access to the files and how long.

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