A virtual data room is an excellent way to keep sensitive information together in a single location and with access managed by an administrator. You can upload documents and files which can be shared with potential buyers or investors for review – increasing efficiency in processes and speeding up due diligence process and the deal-making process.

A data room is typically used during the M&A due diligence process, which virtual data room involves both sides reviewing business-critical documentation and negotiating the terms of the deal. You can also make use of a data room in equity and funding transactions, legal proceedings or any other business deal where you must share sensitive information.

Most data rooms come with a range of templates that you can modify to fit the kind of transaction you’re executing. This allows you to create a folder structure that has names for documents that reflect the purpose of the project, and makes it easier for users to locate what they need quickly. You can create a folder called «financial information» and subfolders to organize documents such as contracts or accounting reports.

A good VDR solution provides a variety of tools for reporting to help monitor and track data room usage. This is especially important after your data room has been opened to a third party, as it provides transparency and accountability of who’s uploaded what document and when. Look for a provider who provides this set of reports as well as ongoing technical assistance and account management, ideal to be available 24 hours a day, 365 days of the year.