How Do You Build a Data Room for Due Diligence?

So you’ve had a fantastic meeting with an investor, and they’re keen to conduct additional due diligence. You’ve heard this is commonplace and that having a well-organized data room can speed up the fundraising process.

It is essential to provide them with a secure online platform to access confidential documents that can be accessed and downloaded from anywhere, even on mobile devices. The goal is to allow prospective investors to be able to review due diligence documents in a secure and efficient manner that is transparent and easy to read. You can also track the activities in your VDR. For instance you can determine who is viewing files and for how long.

The key is structuring your data room in a way that accommodates different requirements and needs. For instance, you’ll need to include the minimum amount of information needed for stage 1 due diligence (e.g. fit to market, product, financial model and cap table). However, you’ll need to provide more detailed details for stage 2 due diligence, such as company documents, securities-related docs, material agreements and staff bios.

You’ll have to decide if you want to open your dataroom to regular users, administrators, or guests. You’ll also have to decide whether you require version control, which permits you to track changes made to a document and ensure that your team members are using the most current version of a document. It is also important to select an organization that offers a virtual dataroom solution that is suited to your specific business needs. For instance, if you require to determine who is reviewing what files and for how long, look for an organization that has auditing capabilities.

https://andvdr.com/what-are-the-types-of-due-diligence/