Fundraising? Here’s why you should track your due diligence documents

Tracking Due Diligence Documents - Digify

Sending your startup’s sensitive documents during due diligence is risky

Sending confidential documents to investors will be increasingly necessary as your startup gains steam and you court investors.

Potential investors may ask to review your startup’s financial information, customer lists and ask for access to your intellectual property to understand what they would be investing in. Sensitive employee information might come into the mix as they assess your team.

And as potential investors conduct more detailed due diligence, they may want their trusted advisors (such as attorneys) to review these documents too. All this sending of your company’s financial, proprietary, and intellectual property information should make you nervous. If not handled properly, this could lead to theft of your PDF and documents and could damage your company.

You can put some controls on your documents and PDFs through many free or inexpensive services. But you will only maintain substantial control over your crucial documents when you incorporate document tracking. PDF and document tracking can allow you to know who is accessing your documents, from where, and for how long.

PDF and document tracking enables you to stay in control

PDF and document tracking allows you to maintain control over who can see the documents and how they can use them. Plus, you can monitor when and for how long they viewed your files.

There are ways to restrict someone from sharing a PDF by making it view-only. However, if you give them permission to print it, you have no control over them making copies and sharing with unauthorized persons. Putting a password on your PDF also has limited effectiveness. Your recipient can use the same password to access the documents from multiple devices and even share the password with unauthorized persons. Without tracking their activity, you have no way of knowing if more people are accessing the documents with the same password.

With PDF and document tracking, you will be alerted when someone accesses your documents. You can also monitor how long they have engaged with the documents, gaining valuable insights for follow-up actions to secure an investment.

Virtual data rooms offer the greatest protection over your startup’s sensitive documents

When your startup reaches the venture capital phase, you must make the most compelling case that your company has the goods, talent, and capability to create a worthy return. The only way to do that is to provide cold, hard data.

Potential investors will need to understand every detail about your startup. You will need to provide sensitive documents that will expose your financial information, intellectual property, and even your employees’ personal data to risk. But it has to be done.

That’s why most savvy founders and CEOs opt for a professional virtual data room to share their files. With a virtual data room, you can control who has access to your files and how they can share them, if at all.
For example, if a potential investor wants to send your financial data to their lawyer for review, they will need to request access for that individual. You will have the authority to grant access and monitor when, where, and for how long they are accessing the data.

More importantly, you will have the ability to revoke access to your documents. This cannot be done with PDFs or other protected-access documents. Likewise, if an investor decides your company is not a good fit, you can revoke their access immediately to prevent them from sharing your proprietary information or intellectual property with other businesses or investors.


PDF and document tracking grants insight into what potential investors are thinking

What startup founder, CEO wouldn’t want to be a fly on the wall when potential investors are considering funding your company? With PDF and document tracking services, you can gain such insights.

Without PDF and document tracking, you will have to play a waiting game with no idea if or when potential investors are evaluating your company. You will have no clue as to what stage they might be at in their evaluation of your startup. PDF and document tracking changes the equation.

First, you will see if potential investors have even looked at your documents. If they are showing a complete lack of interest, you will know to focus your time on other potential investors who are engaged.

Second, you will know which documents they are spending the most time with, so you can better tailor follow-up sessions with these potential investors. You can anticipate questions they might raise and be well-prepared with answers. You will also know who has been accessing certain documents and know to whom to direct answers.

This will help to speed up the due diligence process. You will move from potential investment to actual investment sooner, allowing your business to move ahead of the competition.

If your information is compromised, you’ll quickly know how and by whom

One of the greatest dangers of releasing sensitive documents to a wider audience is not knowing immediately when your data is compromised. Intellectual property theft could have an immediate impact on your startup, or it could be more insidious as outside forces slowly erode your business’s competitive advantages.

If a compromise is grave enough to put your business in jeopardy, you can disable access immediately. You will also have evidence to take legal action against the offender.

Key Takeaways: Why PDF and document tracking is useful

As potential investors and their proxies engage with your documents, PDF and document tracking offers you four advantages:

  1. You know what happens to your tracked file: You will know when potential investors or third parties access your documents. You can see how long they engage with the documents. You will know if they print, download or share the documents with others.

  2. You can undo the sharing of a file: Through tracking, you can revoke access instantly when a file is compromised.

  3. Know where their level of interest lies: You can see which of your documents potential investors are engaging with the most. You can then be prepared to address related questions or provide more related information.

  4. Be alerted about a “ghosting” prospect: If a potential investor who fell off the radar suddenly views your files again, you will be alerted so you can re-engage with the potential investor. You will also know which documents they accessed or interacted with so you can be prepared with the right follow-ups.

Common misconceptions about PDF and document tracking

As your startup looks for potential investment to spur business growth, you may have concerns about taking on too many new responsibilities at the same time. As such, you may have some concerns or misconceptions about virtual data rooms and document tracking, such as:

  1. PDF and document tracking is difficult and complex: As a growing spiderweb of people needs access to your company’s sensitive documents, tracking their access and activity related to your documents may seem complex.

    After all, you might be dealing with multiple potential investors and all the people working for and advising them. But document tracking services such as those offered by Digify take away the complexity by allowing you to set parameters and letting the software do the heavy lifting. It can also alert you to new activities related to your documents, and generate easy-to-digest reports summarizing activities related to your documents.

  2. PDF and document tracking and email tracking are the same: Some people believe email tracking provides them with the insight and control they need over their sensitive documents. However, you may be able to see if someone opened your email and clicked through to the document links, but that’s where the extent of email tracking ends.

    You will not be able to tell how long a potential investor engaged with your documents. There is also no security — the recipient is free to forward your email to as many recipients as they would like without your knowledge.

    PDF and document tracking allows you to know exactly who accessed your files, their IP address, how long they engaged with the documents, and whether they shared or attempted to share the documents with others.

Track your PDF and documents with Digify

Digify ensures the security of your documents with tracking. Receive alerts when someone accesses your documents, and terminate access anytime, anywhere.

Digify also allows you to follow up with investors at the right time. Know how frequently they access your data rooms and files, how long they spend accessing your files, and where they are accessing your files from.

Generate graphs and charts that can be included in reports to executives or board members who need updates on the due diligence process but don’t need all of the finer details. You can also export an activity log for a more detailed breakdown of what various parties are doing with your documents in your data room.

Digify’s virtual data rooms allow you to grant access to files and folders by group or by individual. For instance, you can grant access to a finance department to certain financial data, without giving them permission to access intellectual property files.

You also can use granular permissions to limit specific individuals and groups from accessing particularly confidential information, and customize permissions for different groups and individuals.


Digify Granular Permissions - Document Tracking

Retain control of your sensitive documents with Digify

Maintaining control of your most critical information must be your top priority as you seek investors for your startup. You must tread carefully as you wade through the due diligence process, sharing your intellectual property and sensitive company information.

Digify not only helps you to track your documents, it also helps you implement security measures to protect your data. Digify’s access controls allow you to limit who and how often guests can download, print, and copy files. You can also add customizable watermarks to discourage copying and require your recipients to view your documents with Screen Shield to discourage screenshots.

Sign up today for a 7-day no-obligation trial to see how Digify can help you to retain control of your startup’s sensitive documents, even while sending them to potential investors and third parties.

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