How to choose the right data room due diligence optimized for fundraising

Virtual data rooms for fundraising are gaining popularity and are already used in practice by many companies. Such data rooms have been created in such a way that investors feel comfortable using them. There are quite a few vendors that provide VDRs with fundraising capabilities, but they are very different from each other. In this article, we will tell you how to choose the right VDR for fundraising. 

What is a virtual data room for fundraising? 

A virtual data room is a special online space that was created to help companies in making deals with potential investors about venture capital fundraising. It allows you to store all the sensitive documents you need in its completely secure vault and share them securely with a third party there as well.

VDR will help make any financial transaction twice as easy and can be used to conduct a complex fundraising process much faster and more efficiently. 

How to choose the right data room provider for due diligence and fundraising? 

Every transaction your company does and will do in the future is unique and can have its own nuances and peculiarities.  That’s why it’s important to choose a data room due diligence provider that not only meets all the right standards for the process but also has other useful tools to provide assistance at any point. Below we describe what criteria you should use to choose your VDR provider for fundraising: 

  • Select a vendor based on features – most often, companies choose programs based solely on their price, but you’ll get better results if you base and select a data room based on your needs
  • Be very clear about what you want – how many documents you are going to store in your VDR, how much space you need, what features you would like to see in your purchase, and what business goals you are driving
  • Start researching potential vendors – when you know clearly what you want to look for, it becomes easier. Decide on a few vendor options and start researching its ratings, reviews, ratings, read reviews, and contact the vendors themselves directly for more detailed questions

Major features that should be present in a VDR for due diligence and fundraising 

When deciding on future data room features you should be sure to take several aspects into consideration and below we take a closer look at what a quality VDR for fundraising should include: 

  • Maximum security – A usable data room should definitely have several ways to ensure security because you will be uploading to an online environment and sharing important sensitive company data with outside users during fundraising. A VDR should have a quality security flow, data encryption features, document access control features, virus protection, and a secure physical server location where your data will be stored
  • Accessibility – it’s important that the VDR is flexible to use and supports all devices and operating systems so that your investors can log into the space and examine documents anywhere, anytime
  • Benefits during due diligence – VDRs should simplify and automate many processes during due diligence. Simplified document organization, automatic file formatting and indexing, and due diligence lists will save you time and help in structuring your data room space for greater convenience to potential investors
  • Automatic user tracking is a very useful feature that always helps you stay informed and keep track of your transaction progress. By studying the automatic activity reports in the spaces you can improve weaknesses in your activity, correct errors, and reconstruct the layout of your VDRs