A data room is a place to share confidential information during due diligence with potential buyers, investors, or business partners. This data can include financial information projects, project plans, market research, and even legal documents. Due to the sensitivity of this data it is an essential tool in M&A transactions as well as fundraising, IPOs, and legal procedures. In this article, we’ll discuss the most important features of a dataroom and the steps to take.
Organizing Documents
The structure of your data space should be easy to navigate for everyone. This includes renaming, using consistent file types and categorizing. It is also a good idea to establish an index of the data room, so that all parties can locate what they’re looking for quickly and easily.
Restricted Access
To restrict access to data, you must assign permissions to each user group. Permissions can include access only for downloads, view only or full access. When making these decisions it is best to consider how the data will be used and by who. It is also an excellent idea to set up activity reports that will send out notifications on a regular basis to key stakeholders. This will provide an audit record of all activities that occur in the data room.
It is also essential to check and change regularly permission settings frequently. This will ensure that data is only accessible to those who require it, and also reduce the risk of sensitive information falling into wrong hands.