If you’re selling your business or trying to prepare for an investment round, using a virtual data room will help keep sensitive information in one location, with access set by the administrator. You can upload files and documents that can be shared with potential investors or the buy-side to review – increasing efficiency in processes and speeding up the due diligence and negotiation process.
A data room is usually used during the M&A due diligence process, which involves both sides reviewing business-critical documentation and making negotiations about the terms of the deal. However, you can use a data room for financing and equity transactions and legal proceedings, as well as any other business transactions where you have to share sensitive information.
Most data rooms come with various templates that can be customized to fit the kind of transaction you’re planning to conduct. This allows you to create folders with the names of documents that are relevant to the task and helps users to find the information they need. You can create a folder titled ‘financial info’ and subfolders to organize documents such as contracts or accounting reports.
In addition to the already-built templates and folder structure, a good VDR solution will provide an array of reporting tools that allow you to monitor and monitor the usage of your data room. This is especially important after your data room is opened to a third party, since it provides transparency and accountability of who uploaded which documents and when. Look for a company that provides this set of reports, along with continuous technical support and account management, which should be available 24 hours per day, 365 days a year.