A virtual data room is a great method to store sensitive data together in one location that is controlled by an administrator. You can upload online data room documents and other files that can be shared with potential investors or buyers to be reviewed – thereby increasing efficiency in processes and speeding up due diligence and deal-making process.
A data room is usually used in the M&A due diligence process, which involves both parties reviewing critical business documents and negotiating the conditions of the deal. It is also possible to use a Data Room to conduct legal proceedings, equity and financing transactions, or any other business transaction that requires confidential information.
The majority of data rooms provide an array of templates that you can customize according to the type of transaction that you are conducting. This makes it simple to create a folder structure that has document names that reflect the specific project and make it easier for users to locate the information they need quickly. For instance, you could create a folder called ‘financial information’ and subfolders to hold documents such as contracts or accounting reports.
In addition to the pre-built templates and folder structures, a good VDR solution will provide a suite of reporting tools that let you track and monitor the usage of your data room. This is particularly important when your data room has been opened to a third-party, as it provides transparency and accountability regarding who has uploaded which documents and at what time. Therefore, you should look for an organization that can provide this suite of reporting along with continuous technical and account management assistance, ideally available 24/7/365.