A virtual data room can be a great method to store sensitive data together in a single location and with access controlled by an administrator. You can upload documents and files which can be shared with potential buyers or investors for their review. This can result in process efficiency, and speeds up the deal-making and due diligence process.

A data room is usually used during the M&A due diligence process, which involves both sides reviewing business-critical documentation and making negotiations about the conditions of the deal. However, you can also utilize a data room for financing and equity transactions, legal proceedings or any other business transactions where you require sharing sensitive information.

The majority of data rooms have various templates that which you can modify based on the type of transaction you are conducting. This allows you to build folders with the names of documents that are relevant to the project, and makes it easier for users to find the information they highq need. For example, you can create a folder titled “financial information” and subfolders for documents like contracts or accounting reports.

A good VDR solution comes with a variety of tools for reporting that will help you track and monitor the usage of your data room. This is especially important after your data room has been opened to a third-party, because it offers transparency and accountability regarding who has uploaded which document and when. Find a service that offers this suite of reports in addition to ongoing technical assistance and account management, typically available 24 hours a day, 365 days of the year.