How to Set Up a Virtual Data Room

best virtual data room providers

A virtual dataroom is a technology that allows companies to share and examine documents in a secure environment. It is a standard tool for M&A and strategic partnerships. The most crucial aspect of setting up a virtual information room is to determine what kind of data you’ll be sharing, and making sure that all files are in order.

Start by creating a file and document structure that is a reflection of your due diligence checklist. This includes folders for legal documents including financial statements, contracts, and other due diligence documents. Use consistent and clear name conventions and tag the files with metadata so that anyone can find the information quickly. Make sure you only upload the most recent version of each document and remove the older ones from the dataroom.

Then assign access groups to each document and document based on the requirements of the people who will be using it. Management, for instance, might require full access to the room. Potential investors, however, need to see all the financial documents (balance sheets, income statements, etc).

A central repository for all of your documentation is vital to a successful transaction. It is also important to have a solid security system in place that blocks the entry of anyone who is not authorized. Find a vendor that provides multi-factor authentication, user security authentication and a configurable session timeout to limit access and protect your valuable information. Ask the VDR vendor for information on their customer service. You want to be sure that an expert team will be available 24/7 to answer any issues or questions that arise.