How Do You Build a Data Room for Due Diligence?

How Do You Build a Data Room for Due Diligence?

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You’ve had a wonderful pitching session with an investor, and they’re keen to conduct more due diligence. You’ve heard that this is common and that a well-organized information room can help you accelerate the process of fundraising.

You should provide them with a secure online platform to review confidential documents that are able to be accessed and downloaded from any device, including mobile devices. The goal is to provide an efficient and secure, transparent and safe review of important due diligence documents for potential investors. You can also track the activity within your VDR including who is looking at which files, and for how long.

The key is structuring your data room to meet different requirements and needs. You’ll want to include only the essential information required for stage 1 due-diligence (e.g. product-market fit and financial model). However, you’ll need provide more detailed details for stage 2 due diligence. This includes documents related to the company, securities-related documents materials agreements, as well as staff bios.

You’ll have to decide whether to give access to your dataroom to regular users, administrators, or guests. You’ll also need to consider whether you require a version control, which permits you to track modifications made to a document and ensure that your team members are using the latest version of any document. It is also important to select the vendor that provides an online dataroom solution that will meet your business’s needs. Find a vendor with auditing capabilities, such as, if your business needs to know who is viewing the files and how long they’re.