If you’re selling your company or making preparations for an investment round, the virtual data room can help you store sensitive information in one location, with access granted by the administrator. You can upload documents and files which can be shared with investors or buyers to be reviewed. This can result in process efficiency, and speeds up the contract-making and due diligence process.
A data room is usually used in the due diligence phase of M&A transactions, where both parties look over documents critical to their business and negotiate the terms of the deal. But, you can use a data room for financing and equity transactions or legal proceedings, or any other business deal where you have to share confidential information.
The majority of data rooms have various templates that you can customize to suit the kind of transaction you’re executing. This makes it easy to make a folder structure with names for documents that reflect the project and make it simple for users to locate what they need quickly. You can create a folder called ‘financial info’ and subfolders to organize documents like contracts or accounting reports.
In addition to the pre-built templates and folders A good VDR solution will also provide the tools for reporting that let you keep monitor and track the usage of your data room. This is particularly crucial once your data room has been made available to a third-party, since it allows transparency and accountability about who’s uploaded which document and when. Therefore, you should look for an online service that provides this type of reporting, along with ongoing support for account management and technical issues that is available 24/7/365.