Virtual Data Rooms for Private Placement

If your company is considering taking a private placement (PP) in the near future, you’ll be required to share vital documents that are confidential with prospective investors and partners. A virtual data room is a an additional secure and organized alternative to email and spreadsheets to share information with several parties.

Preparation for PPM: You could create a document library online with permissions tailored to each prospective investor or partner, and track the usage of your library to gauge the level of interest. Dynamic watermarks as well as print and view only permissions, as well as access expiration can prevent any unauthorized access to sensitive documents. Physical Security The physical security of your VDR should have high-end facilities with multiple backups and offsite storage. Also, there should be fire protection, redundancy and biometric access. They should also use an access control system that is granular, as well as forensic auditing and multi-factor authenticating.

Incorporating your own company: You can upload confidential revenue forecasts and IP ownership documents to present potential investors with an accurate picture of the growth potential of your company. You can also upload an updated cap table to demonstrate how equity is divided amongst founders and existing investors. This will help speed up the due diligence process and help you move towards consideration of an upcoming term sheet quicker.

A virtual dataroom can also facilitate collaboration between internal teams as well as external partners by allowing users submit specific questions regarding documents in a dedicated section. The person responsible for answering them can respond them as soon as possible. This reduces the time spent trying to find information in emails or sending files which could be lost.

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