When startup founders decide to move on to the fundraising and investor solicitation phase, they need to think through a lot of things. One of them is company due diligence, during this Due Diligence investors examine all your confidential documents and reports to make sure your schemes are transparent, but how to do such a large file exchange without any risk of data leakage? A virtual data room can be a solution to this problem, and in this article, we will explain how Data Room software helps today’s business and investment industry.
Greater control over file sharing
This is one of the most important features that a virtual data room can provide you in the case of fundraising because you have the right to control access to sensitive files. There are even different levels of protection and you can set different levels of access for different users.
You can also use VDRs to track user activity in the document and their actions on different files.
Those who have been allowed to edit files will be able to make changes to Excel or Word files without leaving the online space. You, as the administrator, will see who made what changes and have access to previous versions of the document.
As for the investor deal itself, with the activity control feature, you will be able to notice what investors have emphasized in your files and what should be worked on more thoroughly for your next negotiations.
Make a good impression on investors
Data room for startups will let your potential investors know that you take your business more than seriously. After all, with VDRs, you have ensured complete confidentiality of your data and taken care of the safety of your financial records. Because of simplified file management, the due diligence process will also go more smoothly and give investors a clearer picture of your business schemes and their transparency.
VDR will be able to provide information about your company in a better light than anything else and demonstrate the purity of your intentions and business plans so that investors can trust you and make a better decision for you sooner.
If there’s a change in your business, VDR users will know right away with a notification.
Cybersecurity is a big issue in today’s world because if it is not properly taken care of, all your valuable information will be at risk. That’s why using VDRs will show investors your informed position and approve your wise decision.
Organize your VDR so you can easily find your most important documents
Many business organizations practice telecommuting, so streamlining certain transactions that allow employees (partners or customers) to work from anywhere is essential. VDR will help you systematize your documents so that you or your investors will have no trouble finding the necessary file from all the information just by entering a keyword in the search engine. The beauty of it all is that this process can be done without any major hitches or questions, which will also speed up the due diligence process and therefore fundraising.