Many people think of data rooms as a method of due diligence when they think of mergers and acquisitions where companies share information with each other in a controlled way. However, due diligence data rooms can also be utilized by lawyers when preparing cases or sharing information with co-counsel or 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 important that all files and documents are uploaded and prepared before inviting third parties to join the portal. A preparation period can be beneficial to organize your files and upload documents in a logical manner without the pressure of deadlines. When the due diligence process begins the granular access permissions for each user can be set for each individual user. Access to folders and documents may be revoked or suspended at any time.
The folder structure of a due diligence dataroom must be logically organized, and have the name that is concise and clear for each document or file. A well-organized structure for the folder makes it easier for users to locate the information they need. Search functions are helpful for quick access to documents. Certain VDR providers such as FirmRoom efficiently manage tasks with integrated board meeting solutions provide pre-made diligence folder templates that can be uploaded to create a simple and efficient directory for your users.