Using Virtual Data Rooms to Streamline Due Diligence in M&A

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Streamline Commercial, Legal, and Operational Due diligence

Virtual data rooms have transformed M&A which has reduced the chance that physical documents will be lost or damaged. They also speed up the due diligence process and encourage value creation. The key to ensuring your VDR can provide these advantages is to set it up properly by choosing the best provider and establishing a proper folder structure, and inviting authorized users. Once the VDR is ready, search functionality will become your digital scout, unearthing details from complex folder structures with pinpoint accuracy.

Organize your VDR according to the different categories of investment due diligence such as governance, finance, intellectual property and human resources, as well as real estate, and litigation. Utilize sub-folders to further organize your information and create a user-friendly index.

Remember that the VCs and other stakeholders you’re in contact with are likely to view your documents in a certain order. Uploading an outdated version could damage the trust of your investors and threaten the terms of a deal.

Select one VDR that has role-based control (RBAC) to manage permissions for documents. This will prevent malicious or accidental actions from unauthorised individuals.

The VDR should allow users to download only the information they require. Watermarks, expiry dates, and limitations on file size are all ways to limit the release of sensitive information. The VDR should also implement an audit trail of all files which allows you to view the exact files each user has viewed. This increases trust and accountability between all parties.