Data Rooms For Due Diligence

The majority of people see data rooms as a method of due diligence when they think of mergers and acquisitions, where companies share data with each other in a controlled way. However, due diligence data rooms can also be used by lawyers in the preparation of cases or sharing information with co-counsel and opposing counsel in litigation proceedings. Investment bankers can make use of them to securely share information during capital raising or IPO preparation with potential investors and underwriters.

It is essential that all files and documents are uploaded and prepared before inviting third parties to join the portal. A time of preparation can be beneficial to organize and upload documents in a systematic way, without the pressure of deadlines. After the main due diligence process has begun it is possible to set granular access rights that can be set for each user. Access to folders and documents may be revoked or suspended at anytime.

The structure of the folders within a data room for due diligence should be well-organized, with a concise and clear name for each document or file. A well-organized structure for the folder makes it easier for users to find information. It’s also helpful to include a search function for quick access to documents. Some VDR streamline collaboration with user-friendly board portal platforms providers such as FirmRoom provide pre-made diligence folder structure templates that can be uploaded to automatically create a logical and convenient directory for your users.