How to Speed Up Fundraising Due Diligence

As a founder of a start-up looking for funding, you should be ready to provide investors from equity such as venture capital firms and angel funding with the data they require to conduct due diligence in fundraising. This is the process by which interested parties investigate a business in order to confirm important metrics and specifics, meet investment criteria, and research possible risks prior to making a decision to invest.

In the process of due diligence, VCs may ask for documents related to your business, including taxes, legals, financials and compliance. Having these documents readily available will expedite the due diligence process and help reduce the amount of time. A VDR can allow you to store and access these documents instantly as well as manage permissions and ensure that only those who require access to them are allowed to do so.

In addition to a VDR, there are other tools you can use to speed virtual data room up the due diligence process. You can create a system that will automatically upload important files to an organized folder. This will ease your work as you will no longer have to manually organize and upload documents. It is helpful to create a schedule of the dates each piece of documentation will be required, so that the VC will know when you are ready to upload the documents.

Another way to prepare for due diligence process is to instruct your gift managers in fundraising due diligence. This includes gift acceptance policies. This could include creating a trigger list of criteria which, if fulfilled and if they are met, will require an additional risk-based rubric, including international opportunities, known crimes or scandals, as well as solicitations that exceed the amount of a certain dollar and gift cards that are named.

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