If your company is contemplating the possibility of a private placement (PP), you will have to share crucial documents that are confidential to potential investors and partners. Instead of relying on emails and spreadsheets, using the virtual data room is a great alternative that provides an organized and secure place to share information with various parties.
Preparation for PPM: You can create an online library of documents with permissions tailored to each prospective investor/partner and track usage metrics to gauge interest. Dynamic watermarks view only, print permissions, and access expiration helps prevent unauthorized use of sensitive documents. Physical Security Physical Security: Your VDR should have facilities that are of a professional standard with multiple backups as well as offsite storage. Also, there should be fire protection, redundancy and biometric access. They should also have the most stringent access controls for forensic auditing as well as multi-factor authentication.
Making an investment in your own Company You can upload confidential revenue projections and IP ownership documentation to provide potential investors with an accurate view of your future growth prospects. You can also upload the current cap table to demonstrate how equity is divided among the founders and existing investors. This will speed up due diligence and enable you to move quicker towards the termsheet.
A virtual data room allows for more efficient collaboration between internal teams as well as external partners by allowing users to submit questions on specific documents in a dedicated Q&A section. These questions can be addressed by the person responsible in the shortest time possible without the need to search for information in emails or sending files that could be lost.