If your company is considering taking a private placement (PP), you will need to share critical documents that are confidential with prospective investors and partners. Rather than relying on email and spreadsheets, using the virtual data room is a desirable alternative that offers an organized and secure space to share information with many parties.
Preparation for PPM: You could create an online library of documents with permissions tailored to each prospective investor/partner and track the usage of your library to determine the interest. Dynamic watermarks as well as print and view only permissions, and access expiration helps prevent the unauthorized use of sensitive documents. Physical Security The physical security of your VDR should have industry-grade facilities with multiple backups as well as offsite storage. Also, there should be redundancy, fire protection and biometric access. They should also use an access control system that is granular, as well as multi-factor authentication and forensic auditing.
Investment in Your Own Company You can upload confidential revenue projections as well as IP ownership documentation to provide potential investors with an accurate picture of your growth prospects. You can also upload an accounting table that shows how equity is split between founders and existing investors. This will speed up due diligence process and enable you to move quicker towards an agreement.
A virtual data space also allows for a more efficient collaboration between internal teams and external partners by enabling users to submit questions on specific documents in a designated Q&A section. The person responsible for answering them can respond questions as soon as it is possible. This reduces the time spent trying to find information in emails or sending files which could be lost.
