If you’re selling your company or preparing for an investment round, using a virtual data room will help you store sensitive information in one location, with access managed by the administrator. You can upload documents and files that can then be shared with potential buyers or investors for review, thereby increasing efficiency in processes and speeding up the due diligence and deal-making processes.
A data room is typically utilized in the due diligence phase of M&A transactions, when both parties go through business-critical documents and negotiate the terms of the deal. You can also use a data room for equity and funding transactions or legal proceedings, or any document management health care other business transaction in which you must share sensitive information.
The majority of data rooms provide several templates that you can modify according to the type of transaction you are conducting. This allows you to create a folder structure that has names that are appropriate to the project and make it simple for users to locate the information they need quickly. You can create a folder titled ‘financial info’ and subfolders to arrange documents such as contracts or accounting reports.
A good VDR solution offers a suite tools for reporting to help track and monitor the usage of the data room. This is especially crucial after the data room has been opened to a third-party, as it provides transparency and accountability regarding who uploaded what documents when. Look for a provider who provides this type of report as well as ongoing technical assistance and account management, ideal to be available 24 hours a day/365 days a year.