How to Create a Relevant and Useful Data Room

When you’re setting up a virtual data room for your business, you want to ensure that you take proactive…
a group of people sitting around a table with computers

When you’re setting up a virtual data room for your business, you want to ensure that you take proactive steps to do it properly. That means that your virtual data room should fulfill all the roles of a physical data room while enhancing your M&A transactions and fundraising efforts through digital conveniences such as cloud integration and data permissions.

So, how do you guarantee that your virtual data room is relevant and useful to the task at hand? Often, that means that you need to take the time to review your virtual data room’s parameters, weigh it against a physical data room, and find where the two diverge so you can meaningfully invest in upgrades and features that make sense for your business. To create a helpful virtual data room for your due diligence process, M&A deal, financial transaction, or fundraising sprint, here are a few things to keep in mind.

Limit data permissions to prevent unauthorized use.


While a traditional data room still has permissions, in a sense, they don’t work as effectively as many virtual data room features. Whether you require a due diligence data room for the due diligence process or you’re structuring a data room for your upcoming fundraising, setting permissions is an effective tool that can help ensure that your data room remains relevant to the task at hand. Commonly, for an online data room, this means that interested parties will be assigned different permissions based on their roles in a given transaction, their security clearance, and other outlying factors.

A virtual data room provider makes it easy to set permissions that limit the level of access an associate has, for example, while providing greater insight and advanced functions to a higher-level representative. This is a necessary tool for dealmakers who want to ensure nobody is tampering with the workflow or accessing the required documents without appropriate clearance. It also helps ward off unqualified potential buyers who could cause real-time bottlenecks for vendors and sellers. When you’re trying to coordinate third parties, interested buyers, law firms, investment banks, and other professionals, the last thing you want to worry about is maintaining the confidentiality of your corporate documents. By limiting unauthorized use, your VDR provider can help you secure sensitive data and limit new users’ access as needed.

Efficiently organize your confidential documents.


When you’re working with large swaths of confidential information, financial documents, and other critical data, the first focus should be keeping it out of the wrong hands. However, you also need to put equal emphasis on ensuring your online data room is intuitive and easy to navigate. Depending on your VDR provider, your online data room should have a robust toolkit for data organization. From financial statements to sensitive documents, you want the ability to establish a data hierarchy within your virtual data room software. The right data room should enable you to set folders, reorganize files, and use structural templates to make it that much easier to navigate between the necessary documents.

With efficient organization tools, it’s that much easier for brands to check in on deal health and review the performance of specific financial transactions. When you’re working with multiple bidders and interested buyers, organizational tools facilitate quick access to the necessary documents which can remove common performance gaps. With the right virtual data room software, you’re putting your organization in a more capable position to navigate any transaction with more ease and confidence.

These days, it’s not enough to establish a data room. You also have to ensure that it’s relevant and useful. From developing different levels of access for different projects to enabling robust security features and easy file management tools, these tips can help you maintain your overall data room utility.