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While seeking funding from investors or being acquired, the first step most third parties conduct is due diligence. Diligence is basically an in-depth review of a business’ official and legal documents. In case of startups composed predominantly of intellectual property, diligence is conducted to assure that the intellectual property actually belongs to them, preventing future infringement suits or licensing deals. Keeping your documents in order is a very important part of running a successful business.

Traklight’s IP Vault is a secure cloud storage service that time stamps all your sensitive information readily retrievable at the push of a button. Storing all relevant documentation in digital form in a single location will help speed up the diligence process by allowing authorized access from anywhere with an internet connection. But if folders within the Vault are not labeled properly it will still cause a ton of confusion and hassle for anyone sorting through the data. Things in the corporate world can crumble in a matter of minutes, so it is in your best interest to streamline the process as efficiently as possible to avoid a lucrative deal going south.

Apart from diligence, keeping your data in order will allow you to make informed and smart business decisions regarding whether your business is prepared for growth and expansion.

What follows is a list of suggested folder names that you can use in your Vault for quick document retrieval, enabling you and others to easily make important decisions regarding scaling your business.

Company Documentation
Store all information regarding the formation of your startup, ownership details, tax information, and the like. Suggested content to upload under this folder include:

  • LLC/Incorporation documents
  • LLC or Shareholders’ Agreements
  • Buy/Sell Agreements, including asset purchase/sale agreements
  • Tax ID information (EIN)
  • Insurance policies (e.g., worker’s compensation, business insurance)
  • Certificates of Good Standing
  • Ownership breakdown
  • Stock certificates and stock ledgers

Banking
Losing track of your loan is common while running a startup in a high pressure environment constantly looking to grow. Startups can hit their loan ceiling before they know it, critically affecting production. Suggested content to upload under this folder include:

  • Account listings
  • Loan documents
  • Collateral

Customer Contracts
A business is built upon clients. Products and/or services are useless in a vacuum without customers. Make sure all documentation related to customer interaction is recorded and stored in the IP Vault, including:

  • Standard agreements
  • Contracts/agreements other than standard agreements (if any)
  • Master Service agreement
  • Website terms and conditions
  • List of top ten customers, organized by estimated US dollar amount
  • Samples of purchase orders and invoices (if any)
  • Contracts with government entities (if any)
  • Description of oral agreements (if any)

People
Specifying employee duties and limitations will make sure something does not come back to blow up in your face. Suggested documents to store under this folder include:

  • Sample employee agreement
  • Sample Director Employment agreement, such as CEO, CFO, and COO (if any)
  • Contractor agreement
  • Non-Disclosure Agreement (NDA)
  • Organizational chart
  • Employee manual, policies, procedures, etc. (if any)
  • Documents pertaining to any receivables from or payable to directors or officers
  • Employee Benefit Plans

IP Filings and IP Inventory
Store all documents related to proof of IP rights such as registrations, first use, etc. Suggested documents to store under this folder include:

  • Patent, trademark, or copyright filings
  • IP Inventory report
  • IP Snapshot report

Suppliers
Suppliers help make a business possible, providing material and services that your business needs to develop. Suggested documents to store under this folder include:

  • Master Services Agreement
  • Subcontractor Agreements
  • List of top ten to twenty suppliers, that includes estimated US dollar amounts
  • Contracts with any government entities (if any)
  • Description of oral agreements (if any)

Finances
Sometimes a business may not have a strong financial base to build upon and should focus more on funding before expanding; keeping an eye on your finances will prevent you from making a big mistake. Suggested documents to store under this folder include:

  • Financial statements
  • Financial projections
  • Tax returns
  • Documents from tax accountants or advisors (if any)
  • Business plan
  • Description of significant bad debts (if any)

Board/Advisory Board
Following board and shareholder decisions is essential and can be overlooked in practice; therefore keeping account of them is a must. Suggested documents to store under this folder include:

  • Agreement
  • Board minutes, including minutes of any committee thereof
  • Shareholder minutes
  • Reports to Directors/committee members

Marketing
Keep track of rights and limitations while relying on third party service providers for marketing purposes.Suggested documents to store under this folder include:

  • Developer Agreement
  • Terms of Use for software

Product and Research
Products may be developed collaboratively, therefore it is pertinent to know that specific rights are assigned to all parties involved. Suggested documents to store under this folder include:

  • Licenses
  • Agreements
  • Research agreements
  • Terms of Use

Valuation
At some point in a business, valuation is conducted and is one of the first things investors are interested in determining.Suggested documents to store under this folder include:

  • Report
  • Methodology

Real Property
Although we are experts on protecting intangible assets, businesses have tangible assets in the form of real property that are vital as well.Suggested documents to store under this folder include:

  • Real property documents
  • Summary of all real property
  • Mortgage documents (if any)
  • Tangible property documents

Regulatory Matters
Investing or acquiring a business that is liable to pay fines for breaching state or federal regulations is unappealing. Keep tabs on all regulatory documents to make sure nothing has expired or needs renewal by including documents such as:

  • Federal and state permits, licenses, consents, including anything pending
  • Federal and state inspection reports as well as a description of each

Environmental Issues
If you are in the consumer market, not following corporate social responsibility practices can damage your business’ image, further affecting your success in the market. Suggested documents to store under this folder include:

  • Environmental liability assessments or environmental compliance audits

Litigation Documents
Before formal business relations are forged, potential partners and/or acquirers want to ensure your business is not embroiled in a legal dispute that will flow over and affect them. Suggested documents to store under this folder include:

  • Anything related to past or ongoing litigation or future litigation.

Miscellaneous

  • Anything else specific to your business that is not listed above that you would wish to share with investors.

Store all your sensitive documentation in Traklight's IP Vault.

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