How to Speed Up Fundraising Due Diligence


How to Speed Up Fundraising Due Diligence

If you are a founder of a new business looking for funding, you must be prepared to provide investors in equity like venture capital firms and angel funds with the information they require to conduct due diligence on fundraising. This is when interested parties investigate the business to confirm key information and metrics, meet the requirements for investment, and study possible risks prior to making a investment decision.

During the due diligence phase, VCs may ask for documents that pertain to your company, such as taxation, legals, financials and compliance. Due diligence can be speeded up and delays reduced if these documents are easily accessible. A VDR can help you keep and access these documents instantly while also managing permissions to ensure that only those who require to access them are able to do so.

In addition to a VDR There are other tools you can employ to speed up the due diligence process. You can set up a system to automatically upload important files into an organized folder. This will help you reduce your workload since you no longer have to manually gather and upload documents. It is beneficial to make a schedule of when each document is required so that the VC can be aware of when you’re ready to upload the documents.

Another way to prepare for the due diligence is to train your gift officers in fundraising due diligence. This includes gift acceptance policies. This can include creating a list of trigger criteria that, when met, will require an in-depth risk rubric. Examples include international potential as well as scandals or crimes known to the public, and solicitations that exceed a specific dollar value, including giving names to donations.

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