Almost every potential investor who approaches your business will want to look at all your documentation before deciding to invest. Since you might not be sure of the integrity levels of the investors, some unauthorized information leaks might occur. This is preventable with a virtual dataroom.
A virtual data room is an important tool during the deal-making process. It ensures the secure sharing of information, answers most of the potential investors’ due diligence questions, and provides an opportunity for you to showcase your expertise. Here are a few ways to use a virtual data room to raise capital for your business:
1.) Maximize Your Deal Value
When making a deal with an investor, you want to do everything possible to get the most out of your deal. With VDR’s auditability feature, you can see who is logged into your data room and who is actively looking at your documents. You can find out which document the user is looking at and for how long. This helps you measure investors’ interest and seriousness and create an auction environment to increase capital.
2.) Secure Your Intellectual Property
While using a virtual dataroom during fundraising, you want to control your company’s most valuable information. The page-level tracking ensures transparency regarding who is viewing which document and at what time. This will act as a deterrent to any possible unauthorized data leak and also provide a way to discover a leak’s origin. You can also ensure your documents are secure by:
- Authorizing who accesses which documents.
- Creating a special login procedure to ensure that not just anybody views your documents.
- Changing the security preferences for different files depending on the value of the information they contain.
- Water-marking and time-stamping every printed and downloaded document.
- Revoking access to certain documents (even after it has been downloaded).
3.) Hasten Your Deal-Making Process
Deal-making processes can be time-consuming, especially when you have to meet in person or send files via email. You often want a deal to move forward as quickly as possible. Having a dataroom that is simple and easy to use can potentially expedite the process. You no longer have to travel to meet with investors. You can simply communicate securely via the virtual dataroom. With a virtual dataroom, you can:
- Upload and organize your documents.
- Learn the software and set up your room easily.
- Respond quickly to any potential investor.
Steps in a Fundraising Process with a Virtual Dataroom
To expedite the whole process of raising capital for your enterprise, you should consider following an organized process. The following are steps that you can set up in your dataroom to potentially promote faster deal-making:
- Ensure that the software you are using aligns with your workflow type.
- Create a clear naming system and organize your documents in a cohesive data structure.
- Control the accessibility of files for both your team and potential investors visiting the virtual dataroom.
- Generate a link to share with your investors to grant them access to the files.
- Closely monitor their activities to pay attention to their interests.
- Store all the agreements you make in the dataroom.
Tips to Successfully Raise Capital
Finding the right source of funding isn’t always an easy process. It can be stressful and filled with uncertainties. Using a VDR, you can avoid these challenges and work to raise capital by:
- Having a plan of how you will achieve your objectives and ensure that your potential client understands them.
- Have a budget in place. Investors want to know how much money they need and how they plan to spend it.
- Make sure to have your pitch ready.
- Treat your investors as customers. This is done by taking the time to get to know them and understand what they want.
- Always have your documents organized and ready to avoid wasting time.
Run Your Business Deals with a Virtual DataroomDo you want to raise capital for your startup or to take your business to the next level? A virtual dataroom can provide the ideal space to share your business’s confidential information with investors. It allows you to remain in control of your information as you look for investors to invest by providing them with the information they need.