How to Use Data Room for Fundraising

Modern VDR is used for absolutely different purposes and industries, including venture capital fundraising. Such a data room features special conditions for investors and partners, for their comfort. It helps to organize and provide all confidential company documents to its potential investors without any risks, and its flexibility and simplicity greatly increase the efficiency of fundraising. In this article, we’ll explain how to properly use VDRs to speed up fundraising.

Install software and a convenient layout

The best VDR providers always offer their help in setting up a data room, and it usually doesn’t take too long since data rooms work over the Internet. We would advise using the training materials provided to you, also testing the functionality of the VDR through any devices. A quality VDR should allow access to files at any time and from any operating system.

After that, you can start organizing your VDR internally. All of your data should be arranged in an intuitive order so that investors can easily adapt to the space and understand what is in any given folder and document.

You can organize your data any way you want without restriction, as long as it’s simple and convenient. Also, it would be nice if you could customize the VDR to match your company’s brand.

Upload your documents and set up access rights

When you have all the folders and subfolders ready, start uploading all the necessary files into them, they must be clearly and specifically named. It will be easier for your investors if you use auto-indexing features when doing this, this will make it easier to find the right document. The best providers also offer bulk upload and drag-and-drop features to make the upload process as fast as possible.

After that comes the important part of assigning access. You need to analyze the privacy of each file and allocate access rights accordingly. Depending on the role of the investor, they will have access to this or that file. Also, some VDRs offer the function of assigning rights between individual users and group users. You can also create multiple data rooms for different stages of fundraising.

For some particularly sensitive documents, this will not be enough. For those cases, you need to apply an NDA feature to set up a non-disclosure agreement with each time a user opens those files.  In addition, in addition to access, you can also control interactions with documents, i.e. allow or disallow copying, printing, editing, screenshotting, and so on. 

Invite users.

To invite all necessary users to the data room you need to send them a unique email link. Other than that, don’t forget to pay attention to the notification settings in your VDR. To keep all your users up to date with new updates, messages, or changes in the data room you need to set up an automatic notification feature for them.

Process the transaction

When you close a deal, you need to carefully monitor and maintain discussions in the virtual investor data room, you can monitor their activity and sign the necessary agreements using electronic signatures remotely and from anywhere. You also have a Q&A feature to improve user interactivity so that all questions are addressed in one place.

We would also recommend that you keep your documents up to date and keep the data room up to date. You will also have the opportunity to organize VDRs differently as your transaction moves to a new stage or takes a different direction.