The process of investing in startups often requires a large exchange of data and documents and it’s essential that the information is safe and well-organized. This is where VDR for investors comes into play, allowing entrepreneurs and other stakeholders to conduct their due diligence with confidence and transparency.
It is important to think about the way your VDR should be organized especially if it’s a dedicated investor VDR. You need to categorize your files based on how they will be used by investors and other people involved in the investment process. Your taxonomy should not only reflect your preferred arrangement but also be logical to the investors. It’s also a good idea for you to prioritize features such as drag-and drop file uploads and permissions that are preset and easy to modify.
Also, it’s recommended to only include information that isn’t subject to confidentiality agreements (CDA). In most cases personal correspondence, employee offer letters and office leases of small spaces shouldn’t be included in the VDR for investors unless they are critical to the company’s growth or operating model. It is also recommended not to include any information protected by the attorney-client privilege. This kind of sensitive information could cause legal issues down the road. A good way to avoid sharing private information is to make use of the document watermarking as well as viewing-only permissions features. You can monitor access metrics on a fine scale and avoid unnecessary disclosures. Furthermore, these features can help you establish trust in your VDR for investors by ensuring that the information is secure and will only be viewed by authorized users.