How to Set Up a Virtual Data Room

A virtual data room is a secure platform that allows companies to share and review documents. It is a common tool for strategic partnerships. It is important to decide what information you want to share and ensure that all files are in order prior to setting up a Data Room.

Start by creating a folder and document structure that mirrors your due diligence checklist. Included in this are folders for legal documents and contracts, financial statements, and due diligence documents. Use clear and consistent naming conventions, and tag files with metadata to ensure that anyone can locate the information quickly. Also, ensure that you only upload the most current version of each file, and remove outdated ones from the data room.

Then create groups of access to each document and file based on the needs of the people using it. For example, management may require full access to the data room. However, prospective investors would must be able to access all financial documents (balance sheets or income statements, for example).

A central repository for all your documentation is crucial for the success of your transaction. But, it’s equally important to have a robust security system that blocks access by anyone who isn’t authorized. You should look for an organization that provides multi-factor authentication as well as user security impersonation and a configurable timeout session to limit access and protect valuable information. It is also important to inquire with a VDR vendor about their customer service. You need to ensure that an expert team are available 24/7 to answer any concerns or questions that arise.