In the realm of due diligence of investors the data room is an extremely useful tool available. Its accessibility by both internal and outside parties at any time allows teams to work more effectively, regardless of location or time zone. This is particularly helpful for hybrid and remotely working businesses.
It’s important to keep in mind that a data space is utilized for more than M&A due diligence, and can be helpful in many different business transactions, such as equity and fundraising. It’s also a valuable tool to have in place for business planning as well as to handle legalities surrounding sharing information, and for protecting intellectual property as well as other confidential data.
Many people use free tools for file sharing to manage documents, however these tools are typically not created with due care in mind. Neither is the rigor needed when it comes to documents for investors. Using a dedicated virtual data room that has a variety of key features (like permission settings, watermarking, auditing capabilities) will ensure that your document is presented in a professional way and will speed the process.
A good VDR provider allows you to modify your logo, terms and conditions, as well as the general design of the data room. It should also offer a variety of subscription plans, including per-page and per-storage options. Also, look for electronic data room features that let you keep track of tasks, Q&A threads, and upload deadlines. All this information in one location will save you time and make follow-up more efficient.