How to Prepare a Virtual Data Room for Capital Fundraising

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Introduction

Raising funds for your organization is hard enough as it is, and you should not have to worry about organizational security during the process. Using a virtual data room for your fundraising efforts can help you focus solely on raising the capital you need while letting the data room take care of everything else.

A well-organized investor data room can significantly speed up the fundraising process. Using a virtual data room can allow you to work more collaboratively, effectively, and efficiently with your investors in real time throughout the lifecycle of the deal. Using the right virtual data room for your fundraising can help you look after each stage of your campaign and lets you share documents with investors in real-time. End-to-end encryption ensures that no unauthorized users can access these documents as only the allowed participants can view, edit, and delete files.

Benefits of using a virtual data room for Capital Fundraising or Start up Fundraising

When organizations don’t have experience with data room solutions or operate on low budgets, they decide to use public access platforms such as Google Drive or Dropbox. While these solutions allow document storage and file-sharing capabilities, the functionality to keep the information safe cannot be compared with that of a virtual data room. Using a data room, although it runs a little bit pricier, translates into one of the best solutions for you to impress potential investors without compromising information security. Let’s look at a few advantages of using a data room for Fundraising.

Data Protection

A virtual data room will help investors interact with the contents in the data room while ensuring human error is ruled out and documents have appropriate protection settings such as watermarking and read-only rights, securing the intellectual property and other highly sensitive information.

Investor Outreach

An organized data room will provide an investor relevant information based on the stage the fundraising is in, while being able to leverage communication tools within the platform to keep the investor engaged and streamline the process quicker.

Customizability

A lot of times organizations would need to show the market opportunities that would make their idea stand out and keep the investor interested. Having a data room that allows you to customize the color palette, have a folder structure, and include company logos will give a unified feel to the whole fundraising process, while delivering the information in a logical and professional manner.

All-Round Control

Data rooms administrators will be able to actively monitor the activity of a user in that data room, giving total control over who has what permission and what kind of interactions a user has had within that data room.

Documents typically involved during a Capital Fundraising include:

• Company Documents, which would include, investor rights agreement, market research, co-sale agreements, articles of incorporation, etc.
• Financial Documents, which would include, profit and loss financial statements, financial model, prior investor updates, growth reports, analysis and valuations, etc.
• Market Research Documents, which would include, market reports, competition analysis, etc.
• Other Documents, which would include, intellectual property, employee contracts, onboarding and hiring process structure, API documentation, etc.

An investor data room would provide a complete list of the required documentation for streamlined due diligence. This would also include a comprehensive pitch deck that would give the investors information about the company’s vision, mission and value.

Conclusion

A virtual data room should help organizations and investors have a streamlined and user-friendly interface, allowing the users to be able to easily navigate through the fundraising process. The most important aspect is finding the right vdr for your Fundraising.

Govern 365’s virtual data rooms are built to work with Microsoft 365 Teams and SharePoint to protect your sensitive information while ensuring data sovereignty. Built on Microsoft Purview, external and internal recipients can safely & securely take advantage of secure collaboration while having data stored in their own repository, while having an intuitive user experience that allows you, the IT Admin, to customize the product to suit your organizational needs. You will also be able to track all user activity within a specific data room to make sure your sensitive information is not getting into the wrong hands. Use SharePoint and Teams like you already do and rest easy knowing that all your sensitive information is protected no matter where it goes. Take some time to test the usability of the product by reaching out to us for a free trial.