Whether you’re selling your business or making preparations for a fundraising round, a virtual data room helps you keep sensitive information in one place with access controlled by the administrator. You can upload documents and files which can be shared with investors or buyers to review. This improves the efficiency of your process, and speeds up the negotiation and due diligence process.
A data room is usually utilized in the due diligence phase of M&A transactions, where both parties review documents that are critical to business and negotiate the terms of the deal. You can also utilize a Data Room to conduct legal proceedings, equity and funding transactions, or any other document management transaction that requires confidential information.
Most data rooms offer a variety of templates which you can modify based on the type of transaction you are conducting. This makes it easy to create a folder structure using names for documents that reflect the specific project and make it simple for users to find what they need quickly. You can create a folder called ‘financial info’ and subfolders to organize documents such as contracts or accounting reports.
A good VDR solution offers a suite reporting tools to help you track and monitor the usage of your data room. This is particularly important after the data room has been opened to a third-party, as it provides transparency and accountability about who uploaded what document at what time. It is therefore important to choose a provider that offers this suite of reporting along with ongoing technical and account management support that is accessible all hours of the day, every day.