When you’re selling your business or trying to prepare for an investment round, the virtual data room can help keep sensitive data in one place, with access managed by the administrator. You can upload files and documents that you can share with potential buyers or investors for their review. This creates process efficiencies, and speeds up the deal-making and due diligence process.
A data room is typically used in the due diligence phase of M&A transactions, when both parties review business-critical documents and negotiate the terms of the deal. You can also use a Data Room to conduct legal proceedings, equity and funding transactions, or any other business transaction that requires confidential information.
Most data rooms offer a variety of templates which you can modify based on the type of transaction that you are carrying out. This makes it easy to create a folder structure that has names that are appropriate to the purpose of the project, and makes it easy for users to locate what they require quickly. For instance, you can create a folder called ‘financial information’ and subfolders to hold documents such as accounting reports or contracts.
A reliable VDR solution offers a suite reporting tools to help you track and monitor the usage of the data room. This is especially important after your data room has been opened up to a third party, because it offers transparency and accountability of who’s uploaded what document and when. You should therefore choose an option that provides this kind of reporting along with ongoing technical and account management support which should be available all hours of the day, every day.
