How to Speed Up Fundraising Due Diligence

If you are the founder of a startup that is seeking funding, it is important to be prepared to give investors who are able to raise equity funds like venture capital firms or angel funding the information needed for due diligence in fundraising. This is the process where interested parties study a company to verify important metrics and information that meet the investment criteria and research possible risks prior to making an investing decision.

In the process of due diligence, VCs will ask for documents pertaining to your company’s operations, financials legal, taxation, and compliance. The availability of these documents will expedite the due diligence process and cut down on the amount of time. A VDR can help you save and access these documents immediately and manage permissions. It will also ensure that only those who need access to them are permitted to do so.

You can speed up due diligence by using other tools, in addition to the VDR. You can set up a system to automatically upload important files to an organized folder. This will cut down on the amount of work you have to complete, since you don’t have to manually collect and upload documents. It is also helpful to develop a timeline of when you’ll have to provide each piece of documentation so that the VC will know when you are ready to submit the documents.

Another method of preparing for due diligence process is to train your gift coordinators in fundraising due diligence. This includes gift acceptance policies. This could involve preparing a trigger list of criteria which, if fulfilled and if they are met, will require a more thorough risk assessment, such as international opportunities, known crimes or scandals, as well as solicitations over an amount of money including naming gifts.