The due diligence process is something any entrepreneur faces. At this point, he must especially control the security and management of his documents, as well as organize them well so as not to confuse his potential clients. In today’s world, many activities have been moved online, but at the same time, they are exposed to many dangers from the internet. To avoid this, many companies have long used virtual data rooms; they provide a secure space to perform due diligence smoothly.
What is a due diligence data room?
Data rooms are a web-based repository that guarantees complete security of your valuable data within its space. They’ve been around since the early 2000s, but have only recently become particularly popular. Businesses can safely store and share sensitive data, as well as to conduct transactions and actual due diligence.
VDR has a high level of security and allows the administrator to fully control access to his files, as well as actions that can be done with this file. In this way, you can give your potential partners access to the data room for the duration of the due diligence and eliminate the need for a real meeting.
What data room features are important for due diligence?
Below we will highlight a few features of quality VDRs that are more relevant than ever during due diligence:
- Volume storage – The due diligence process requires a large volume of documents, quality data room providers are ready to provide you with a voluminous space. Don’t skimp on gigabytes, because if you don’t have enough you’ll end up having to overpay for additional space
- User Access Control – This feature defines user access to documents based on their roles. An administrator can hide documents from some users but allow access to others
- Deployment software – Communicate with your partners via live chat or phone calls, all conversations are fully encrypted and secure
- Remote wipe – If there is a loss you can easily delete the data remotely so that confidential information does not fall into the wrong hands
- Double Logon – Protects your system from unauthorized access
- Encrypted data -Data will not provide any value if stolen
- Support Service – It is important that your technical support stays in touch at all times to answer all your questions and fix problems.
How do I use a virtual data room for due diligence?
Due diligence requires your special attention and clear organization, and below we will tell you how to use virtual data room during this procedure to make it easy for yourself and show your best side:
- Prepare a Checklist -this is a list of documents that you must submit during your due diligence, gather all the necessary files to upload to the VDR
- Create a unique and authentic data naming system -do not call your files by generic names, this will only confuse you later. Develop your naming scheme for your documents, paying attention to the type of document and the elements it includes
- Organize your data room – the structuring of your folders should be understandable for you and your clients, some VDRs make it easy for you by offering templates
- Upload files – this is very easy to do if VDRs have a bulk upload feature
- Invite users – set up access for each user that enters your space
- Prioritize and schedule -this will help you stay on track and unify workflows and calculate costs