27 Sep How to Speed Up Fundraising Due Diligence
As the founder of a startup looking for funding, it is important to be ready to provide investors with equity funding, such as venture capital firms or angel funding the information needed for due diligence in fundraising. This is the time when interested parties look into the company to verify important details and metrics, meet the criteria for investment, and research the possibility of risks prior to making an investment decision.
In the process of due diligence, VCs will ask for documents related to your business operations, financials taxation, legal and compliance. Due diligence will be made more efficient and delays minimized if these documents are readily available. A VDR can allow you to store and access these documents instantly while also managing permissions to ensure that only those who are required to see them are allowed to do so.
You can accelerate due diligence by using other tools that complement the VDR. They include setting up an automated system that uploads key files to an organized folder. This will decrease your workload as you will not have to manually gather and upload documents. It is also beneficial to develop a timeline of when you’ll need to provide each piece of documentation so that the VC will know when you are ready to submit the documents.
Training your gift managers on fundraising due diligence and gift acceptance guidelines is another effective method to ensure that you are prepared for the due diligence process. This can involve creating an outline of trigger criteria that, when met requires an in-depth risk rubric. Examples are international prospects as well as scandals or crimes that are known to the public, and https://eurodataroom.com/fundraising-due-diligence-checklist/ solicitations that exceed a certain dollar amount, like name-based donations.