Companies that are involved in a M&A deal need to disclose confidential information to investors and advisors. In a virtual data room (VDR), this can be done in a secure and highly controlled environment, which is far more efficient than face-to-face meetings and allows for a streamlined due diligence process.
To make a dataroom user-friendly, the folder structure should be logical and easy to follow, with documents and folders clearly identified. This will allow buyers to find the documents they’re searching for faster and will reduce confusion.
It is essential for users to be able to make notes on documents that only accessible to them, so that they can write down their thoughts and raise questions. The most effective VDRs come with a variety of annotation tools such as highlighting, underlining and adding comments, and the option to draw on images to create note boxes. This is a simple, but effective feature that can improve overall common data room features collaboration.
A Q&A section of the data room is a further important feature. It is a great way to answer general questions, as well as specific inquiries about files. This will allow users to track and respond to inquiries, and some providers allow questions to be referred to experts in order to offer professional assistance in a timely manner.
To ensure that all data is securely secured, it’s vital that a data room offers full security features. This should include granular permissions on both the folder as well as document level, two-factor authentication, and watermarking of documents. Additionally, a lot of data rooms will provide reporting on all activity and user actions to help with compliance and supervision.