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If you’re selling your company or making preparations for a fundraising round, a virtual data room helps keep sensitive data in one location, with access managed by the administrator. You can upload files and documents that can be shared with investors or potential buyers to review. This can result in process efficiency, and speeds up the contract-making and due diligence process.

A data room is typically used in the due diligence phase of M&A transactions, when both parties go through business-critical documents and negotiate the terms of the deal. It is also possible to use a Data Room to conduct legal proceedings, equity and financing transactions or any other business transaction that requires confidential information.

The majority of data rooms have several templates that you can modify according to the type of transaction that you are carrying out. This makes it easy to create a folder structure with names for documents that reflect the project and make it simple for users to locate what they need quickly. For instance, you could create a folder named ‘financial information’ and subfolders to hold documents such as contracts or accounting reports.

In addition to the pre-built templates and folders A good VDR solution will offer a suite of reporting tools that let you monitor and monitor data room usage. This is particularly important after the data room has been made available to a third party, as it allows transparency and accountability regarding who uploaded what document at what time. You should therefore look for a provider that offers this type of reporting, along with continuous technical and account management assistance that is available 24/7/365.