A virtual data room can be a great option to keep sensitive data together in a single place, with access controlled by an administrator. You can upload files and documents that you can share with investors or buyers for review. This improves the efficiency of your process and speeds up the decision-making and due diligence process.
A data room is typically utilized during the M&A due diligence process, where both sides reviewing business-critical documentation and negotiation of the conditions of the deal. However, you can use a data room for equity and funding transactions or legal proceedings, or any other business transaction in which you have to share confidential information.
The majority of data rooms have various templates that you can modify to fit the type of transaction you’re planning to conduct. This allows you to create folders with names for documents that are relevant to the task and helps users to locate what they require. For instance, you can create a folder with the name “financial information” and subfolders for documents such accounting or contract reports.
A good VDR solution comes with a variety of tools for reporting that will help you monitor and track data room usage. This is particularly crucial once your data room has been opened up to a third party, because it offers transparency and accountability of who’s uploading what documents and when. Choose a provider that offers this kind of reports and also continuous technical support and account management, which should be available 24 hours per day, 365 days per year.