Data Rooms For Due Diligence

Posted by Security Vault

The majority of people think of data rooms as a tool to conduct due diligence when they think of mergers and acquisitions, where companies share information with each other in a controlled way. Due diligence data rooms are also utilized by lawyers to draft cases or share information with co-counsels as well as opposing counsel during litigation. They can even be used by investment bankers as a tool to securely share information with potential investors or underwriters during capital raises and IPO preparation.

It is vital that all files and documents are uploaded and prepared before inviting third parties to the portal. A preparation period can be useful to organize and upload documents in a systematic way without the pressure of deadlines. After the primary due-diligence process has been completed users can establish the permissions to access their link files in a granular manner. They can also revoke or suspend access to folders and files at any time.

The structure of the folders in a due diligence data room should be well-organized, with a concise and clear name for each document or file. A well-organised folder structure makes it easier for users to locate information. A search function is also useful for quick access of documents. Some VDR providers like FirmRoom offer pre-made diligence folder structure templates which can be uploaded to automatically create a simple and efficient directory for your users.