When people think of data rooms for due diligence, they think of mergers and acquisitions involving companies sharing information with other parties in a controlled way. Due diligence data rooms are used by lawyers to prepare cases or share information with co-counsels and opposing counsel during litigation. They can also be used by investment bankers as a tool to share confidential information with potential investors or underwriters when it comes to capital raising and IPO preparation.
It is essential that all files and documents are uploaded and prepared before inviting third parties to the portal. A preparation period can be useful to organize and upload documents in a logical manner without the pressure of deadlines. Once the main due diligence process has begun the granular access permissions for each user can be set for each user and access to folders and documents can be revoked or suspended at anytime.
The structure of a folder in a due diligence dataroom should be organized in a logical manner, with names that are clear and concise for every document or file. A well-organised folder structure VDR allows users to locate information. It’s also helpful to include a search function for quick access to documents. Some VDR providers like FirmRoom provide pre-made diligence folder templates that can be uploaded to automatically create a logical and convenient directory for your users.