The majority of people see data rooms as tools for due diligence when they think of mergers and acquisitions which are when companies share information with one another in a controlled manner. Due diligence data rooms are also utilized by lawyers to draft cases or provide information to co-counsels and opposing counsel during litigation. Investment bankers can utilize these rooms to share confidential information during capital raising or IPO preparation with potential investors and underwriters.
It is essential that all files and documents are uploaded and prepared prior to inviting third parties to the portal. Often, a pre-planning time is required to aid in organizing and upload documents in a structured manner, without the pressure of deadlines. Once the main due diligence process begins and you have a clear understanding of the process, access permissions can be set for link each individual user and access to folders and documents may be suspended or revoked at anytime.
The folder structure of a due diligence dataroom should be organized in a logical manner, with a name that is concise and clear for each document or file. A well-organized folder structure allows users to locate the information they need. It’s also helpful to add the ability to search for access to documents. Some VDR providers like FirmRoom offer pre-made diligence folder templates that can be uploaded to create a sensible and easy directory for your users.