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What documents founders must have in their virtual data room for fundraising

Every successful startup has a moment when it has finally found a working business model and begins the process of attracting investments -fundraising. In this article, we will discuss how does virtual data room for fundraising works.

Why does the process of fundraising is better organized in the data room?

Fundraising is the process of attracting investments from venture capital funds and angel investors to a startup to scale it up, enter new markets, and expand the team. The advantages of fundraising are the possibility of direct interaction with civil society and not just the search for support from the owners of large financial capital.

At the fundraising stage, in addition to preparing an Investor Pitch Deck and a financial model, the founder of a startup begins to think about the legal questions that the investor will ask – in other words, prepare for due diligence. As it is a complex and time-consuming procedure, most companies prefer using virtual data room software to ensure transparent collaborations and easy and secure data exchange.

Besides, the success of various forms of fundraising largely depends on the ability of fundraisers to explain to potential donors the attractiveness of the proposed projects, the presence of common interests, possible prospects for partnership. In this situation, a digital data room is also a solution as the software helps to set up interaction between contractors.

Following https://ddraum.de/preise/, today virtual data room (VDR) is an advanced standard during confidential business transactions and becoming an integral part of the business IT infrastructure. It is a set of tools for creating, editing, distributing files with the ability to differentiate access rights and control over them. Using the software helps to comprehensively organize work with electronic documents, processes, and tasks, simplify and optimize work with company documentation.

How does the data room work?

The Digital data room includes functional blocks that help the company perform tasks related to working with fundraising documents. The following main groups of tools for automating deal management can be distinguished:

  • Creation of accounting for incoming/outgoing documents and correspondence, internal orders, and documents in VDR. Registration and certification of a document using an electronic signature. Changing document statuses upon approval/consideration/approval/registration/execution. Entering documents into the program by scanning or barcoding, organizing accounting and storage. Formation of an electronic archive, search for the desired document. Customizable control of tasks related to documents.
  • Automation of work with contracts and documents. VDR provides an opportunity to automate this work at every stage. Preparation and coordination, control of return and deadlines, termination of the contract. The program saves all file versions and changes. An extended set of functions for working with contracts (formation of a list and working calendars, planning deadlines, analytics);
  • Process management. When working with documents, the customizable launch of related business processes is possible. This allows you to build chains of separate processes, create a consistent hierarchy. VDR provides 9 standard processes launched when processing documents. It is also possible to create additional processes and tasks that will be reflected in the document card. These include personnel processes, activities, project tasks. These are controlled processes with the possibility of appointing a responsible person, monitoring and generating analytics;
  • There are several collaboration options available in the program. The main one is group processing of documents (change, approval, approval). The additional ones include the preparation of events, the organization of planning meetings, meetings, meetings, etc.;
  • All electronic documents are protected in your personal account. The risk of being lost or sent to intruders is reduced to zero.