How to Speed Up Fundraising Due Diligence
As a startup founder seeking funding, you need to be prepared to provide investors in equity, such as venture capital firms and angel funding with the information they require to conduct fundraising due diligence. This is the time when interested parties research the business to confirm key details and metrics, satisfy investment criteria, and investigate the potential risks prior to making a investment decision.
During the due diligence stage, VCs will ask for documents that pertain to your business’ operations, financials, legal, taxation, and compliance. Due diligence will be speeded and delays will be reduced by having these documents readily available. A VDR will help you store and access these documents in a matter of minutes and manage permissions. It will also ensure that only those who require to see them https://eurodataroom.com/how-can-an-online-data-room-benefit-your-business/ are allowed to access them.
You can speed up due diligence by using other tools, in addition to the VDR. They include setting up an automated system for uploading important files to an organized folder. This will cut down on the amount of work to complete, since it won’t be necessary to manually collect and upload documents. It is also helpful to develop a timeline of when you’ll need to provide each piece of documentation so that the VC is aware of when you are ready to provide it.
Another method to prepare for due diligence is to train your gift officers on fundraising due diligence. This includes gift acceptance policies. This can include developing an appropriate trigger list of criteria that, if met, will require an additional risk assessment, such as international opportunities, known crimes or scandals, and solicitations exceeding an amount of money and naming gifts.
