1. Set The Right Data Room Folder Structure
Data rooms give you the privilege of effortless data organization. But in order to make it work, it’s essential to set the right folder structure. The idea is to make a balance between adding too many and too few folders. Our suggestion is to divide information into key themes and areas:
- Tax folder
- Commercial folder
- Corporate and financial folder
- Legal folder
- Technical folder
- Environmental folder
- HR and operational folder
This type of data room index will help all participants to easily find their way through complex data structures.
2. Follow the due diligence checklist
A virtual data room ensures a smooth due diligence process, but it becomes much more efficient when you follow a dedicated due diligence data room checklist. The list should contain standard due diligence documents and steps to execute a due diligence process. We are talking about these elements:
- Assets and liabilities
- Financial documents
- Possible drawbacks
3. Set the permissions
The best thing about due diligence data rooms is the ability to securely manage sensitive data and confidential documents. Unlike traditional data rooms, virtual counterparts enable you to set the right access levels for each user or group of users. Depending on the role, each user will have different permission in terms of accessing sensitive documents, uploading or deleting files, editing information, and so on.
4. Upload the documents
Now it’s time to upload all the relevant documentation into the due diligence data room. That includes financial statements, data on business transactions, contracts, investments, and asset inventories. Of course, do your best to double-check all the information and documents before you upload them.
5. Invite users
Modern data room providers allow you to send invitations when everything is in place. It’s a big benefit compared to physical data rooms because you can invite all the necessary parties to the online platform with just a few clicks. This includes users from opposite sides of a deal, as well as third-party advisors or auditors who are necessary for financial due diligence.