What Are Data Rooms?
When you’re selling your business or planning a fundraising round, a virtual data room helps keep sensitive information in one location, with access set by the administrator. You can upload files and documents which can be shared with potential buyers or investors to review. This can result in process efficiency and speeds up the deal-making and due diligence process.
A data room is typically utilized during the M&A due diligence process, where both parties looking over business-critical documents and discussing the conditions of the deal. But, you can utilize a data room for equity and funding transactions and legal proceedings, as well as any other business deal where you must share sensitive information.
Most data rooms come with several templates that you can customize to suit the type of transaction you are undertaking. This allows you to create folder structures that have names for documents that are relevant to the project, and makes it easier for users to locate what they require. For instance, you can create a folder with the name „financial information“ and subfolders for documents such as accounting reports or contracts.
A reliable VDR solution offers a suite reporting tools to help you monitor and track the usage of your data room. This is particularly important once your data room has been opened up to a third-party, since it allows transparency and accountability regarding who has uploaded what document and when. Look for a company that offers this suite of reports and also continuous technical assistance and account management, which should be available 24 hours per day, 365 days per year.