How Do You Build a Data Room for Due Diligence?

You’ve just had a great pitching with an investor, and now they’re keen to conduct more due diligence. You’ve heard that this is common and that a well-organized data room can speed up the fundraising process.

You need to provide them with a secure online space to look over confidential documents that can be downloaded and accessed from any location, including mobile devices. The aim is to facilitate a quick and secure, transparent and safe review of key due diligence documents for potential investors. You can also monitor the activities within your VDR. For example you can determine who is examining files and for how long.

It is important to structure your dataroom to meet various requirements and demands. You’ll want to include only the necessary information for stage 1 due-diligence (e.g. the market fit of the product and financial model). You’ll require more specific information for stage 2 due diligence. This includes documents from the company, securities related documents, material agreements, and bios of employees.

You’ll have to decide if you want to give access to your dataroom to regular users, administrators, or guests. You’ll have to decide if you require version control. This lets you monitor changes made to any document and ensures that all team members are able to access the most recent version. In the end, you’ll need select a vendor who offers the option of a virtual data room that will meet your specific business requirements. Find a company that has auditing capabilities, for example for your business if you need to know who has access to the files and how long.