When startup founders get to the fundraising stage they need to be properly prepared for everything that awaits them, namely fundraising. Before investors want to partner with you, they need to make sure that it’s beneficial to them, which is why due diligence is so important. To make this process go as quickly and efficiently as possible, wise users use a virtual data room. This solution is great for storing and sharing sensitive company data, and will therefore provide the right environment for your startup.
What is due diligence?
Due diligence is a process that involves a great deal of sensitive company data. This data needs to be presented to a potential client or investor for detailed scrutiny, so they can determine whether a deal with you is beneficial. This process is very time-consuming and lengthy, as investors need to make sure that they have analyzed all aspects of your business.
In addition, if your data is poorly organized and protected it can firstly delay the process even longer and secondly compromise the integrity of your data. But by using data room software, you can optimize, facilitate and speed up the entire verification process, while ensuring that your documents have the proper level of protection. Below we’ll talk about the qualities that every quality VDR provider for startups should have.
Controlling and Tracking Document Actions
The best data room software should give their customers detailed permission to use documents. You decide which of your invited users can have certain capabilities. You can deny access, copying, forward, uploading, and printing of documents, set permissions based on roles, give group or individual permissions. This will greatly increase data security and reduce the risk of leakage.
The VDR should also give you the ability to track the activities of all users. You will be able to see how much time the person spent examining the document, what actions they performed on the file, etc. You will also be able to track changes in the document. Monitoring will also help you learn the main aspects of your activities that you should pay attention to in a meeting.
Due level of security
Any self-respecting provider should provide quality security services. Key features that are commonly used in the best VDR solutions are data encryption, dual authentication, watermarks, and document expiration dates.
All of these features combine to create a virtually impenetrable security system that reduces the risk of data leakage to almost zero. People involved in the business are well aware of this, so using data room during due diligence investors are sure to note your serious intentions and responsibility, which of course will not be overlooked during their decision-making process.
As mentioned, due diligence requires a large number of documents from you. It can take quite a bit of time to organize them properly, even with them being in digital format. That’s why the best VDRs offer several options to ease your plight. For example, by using the bulk upload, or drag and drop feature you can save a lot of time transferring them into space. Automatic formatting and indexing features will also help you streamline the process of organizing documents. Create your own unique document storage schemes that both your employees and guest users can understand, and the smart search feature lets you find the document you need in a fraction of a second.