Setting up a secure diligence vault is now an important step for CEO’s raising funds. It also becomes the foundation for future rounds and peace of mind for corporate executives. As we always recommend when speaking to an audience of CEO’s, "You need to think like an investor." When it comes to due diligence, investors want quick, simple access and accurate information. It shouldn't create a barrier for due diligence.
A simple linear process for walking through your company documents is paramount. CEO’s need the same thing, less friction, quicker decisions by investors and a smooth investment process. A few key elements that will keep the investor engaged.
1. Name your documents with a simple descriptive title. There is nothing worse for an investor than trying to identify a document by an internal format. For example:
a. ABC Company investor deck (date) 7122021.pdf
b. ABC Company Exec Sum (date) 7122021.pdf
2. Diligence Vaults are not a catch all. Accurate information in each folder is expected. If
there are ancillary, non-supportive and incomplete documents included in the folders, investors loose interest quickly.
3. Survey information, testimonials, and supportive research specific to your product/service is very important.
4. Name your folder accurately and only add information pertinent to that section
PRESENTATION DOCUMENTATION
Deck
Summary
Summary financials
CORPORATE INFORMATION
Corporate documents and shareholding structure, including minutes of board and shareholder meetings, a list of shareholders, tax registration, and more.
INVESTMENT DOCUMENTS
Private Placement Memorandum
Bridge Loan or Convertible Note
Instructions for the transaction e.g bank wire instructions (Most companies leave this out and it causes back and forth interactions that slow the investment process)
FINANCIAL DETAILED DOCUMENTATION
Financial documents, including audited and unaudited financial statements, as well as financing and loan documents.
AGREEMENTS
Material agreements, particularly partnership agreements, agreements pertaining to the supply, maintenance, sale, and purchase of goods, lease agreements, licensing and franchise agreements, and other related documents.
ASSETS
Company assets, including documents on physical and intellectual property, as well as current inventory.
PERMITS & LICENSES
Permits and licenses, covering all aspects of company operations.
TEAM
Executive bio's, human resources data (if applicable), including the total number of employees, employment agreements, HR policy, work permits, any current labor disputes.
INSURANCE
Insurance information, D&O, E&O any employee health insurance and asset insurance.
LITIGATION
Information on pending litigation by or against the company, as well as any potential litigation, arbitration or investigation that may affect the company.
ADDITIONAL INFORMATION & ROADMAP (if applicable)
Additional documentation that may be uncategorized and any future roadmap information that helps an investor identify your trajectory.
By making your vault simple to use and navigate, investors will engage quicker and with more confidence.