How to Set Up a Virtual Data Room

A virtual dataroom is a system that allows companies the ability to share and examine documents in a safe environment. It is a common tool used for mergers and acquisitions, as well as strategic partnerships. The most important part of setting up a virtual room is to determine what kind of data you will be sharing and ensuring that all the files are in order.

Begin by creating a document and document structure that matches your due diligence checklist. This includes folders for legal documents, contracts, financial statements and due diligence material. Use clear and consistent naming conventions, and tag files other with metadata to ensure that anyone can find the information quickly. Be sure to upload only the most recent version of every document and remove the older versions from the dataroom.

Then create groups of access to each document and file based on the requirements of those using it. For instance, management may need full access to the room. Potential investors, however need to see the entire financial documents (balance sheets and income statements, for instance).

A central repository for all of documents is essential to an efficient transaction. It is also vital to have a secure security system that prevents access by anyone who isn’t authorized. Find a vendor with multi-factor authentication, user security authentication and an adjustable session timeout in order to limit access and protect your precious information. It is also important to inquire with the VDR vendor about their customer support. You should know that the team is available 24/7 to answer any questions or concerns.