A virtual data room can be a great option to keep sensitive data together in a single place with access managed by an administrator. You can upload documents Recommended Reading – Why Virtual Board Rooms Are the Future of Corporate Decision-Making and files that you can share with investors or buyers to be reviewed. This helps to improve the efficiency of processes, and speeds up the contract-making and due diligence process.
A data room is generally utilized during the due diligence phase of M&A transactions, when both parties review documents that are critical to business and negotiate the terms of the transaction. However, you can also make use of a data room in equity and funding transactions or legal proceedings, or any other business transaction in which you require sharing confidential information.
Most data rooms come with an array of templates you can modify to fit the type of transaction that you’re undertaking. This makes it simple to create a folder structure that has names that are appropriate to the specific project and make it easier for users to locate the information they require quickly. You can create a folder titled “financial info” and subfolders to arrange documents such as contracts or accounting reports.
A good VDR solution will provide a range of reporting tools to help you keep track of and monitor usage of your data room. This is particularly important after your data room is opened to a third party, since it provides transparency and accountability on who uploaded which documents and when. Choose a provider that provides this set of reports in addition to continuous technical assistance and account management, typically available 24 hours a day/365 days a year.
