How to Set Up a Virtual Data Room

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A virtual dataroom is a system which allows companies to share and examine documents in a safe environment. It is a well-known tool for mergers and acquisitions as well as strategic partnerships. It is important to decide which information you want to share, and make sure that all documents are in order prior to creating a data room.

Create the structure of your file and document list that reflects the due diligence checklist. This includes folders for legal documents, contracts, financial statements and other due diligence documents. Make sure to use consistent and clear name conventions and tag the files with metadata to make it easier for anyone to find the information they need quickly. Make sure you only upload the latest version of each document and remove the older ones from the dataroom.

Next, create access groups for each file and document in accordance with who needs what. Management, for instance, may need full access to the room. Potential investors, however need to have access to all financial documentation (balance sheets and income statements, for example).

A centralized repository for all your documentation is crucial to a successful deal. However, it is equally vital to have a secure security system that blocks unauthorised access. Look for a provider with multi-factor authentication, user security impersonation, and the ability to set a session timeout that can be adjusted to restrict access and protect your precious information. You should also ask the VDR vendor about their customer support. You need to know that a team will be available all hours of the day to address your questions or concerns.