The creation of virtual data rooms is a crucial component of the M&A process as it allows companies to share documents easily and accelerate due diligence. In addition, it saves on time and money that could have been used to print, scanning, and sending files via email. These cost-saving benefits allow M&A transactions to be completed quicker, and the expected synergies to be realized earlier.
It is important to decide what user roles will be able to access the VDR, and which documents they can access. For instance, acquirers need access to business plans, financial statements as well as other important documents for a thorough evaluation of the target company. Investors should be allowed to access certain documents. As a result of this, the buyers should have access to all of the information. To further protect sensitive data such as sensitive data, a virtual data room should provide a watermarking and auditability to avoid leaks of data.
In order to organize the virtual data room, it is crucial to use templates for folders and to have a clean and easy-to-use directory structure. For example using a due diligence checklist, and including topics and subfolders can help users locate the files they require with less effort. Another helpful VDR feature is indexing, which labels documents with keywords or metadata which can be used to locate them easily. Lastly, VDRs that support version control make sure that users have the most current version of the file.
A virtual data room should also include a robust question and answer function that allows all parties to arrange questions and answers efficiently. Administrators can then respond to new questions and avoid having the same information sent over again.