The information and documents in data rooms regardless of industry or size are usually private and must therefore be protected. M&A firms should not make corners in this area. Due diligence involves reviewing a large number of sensitive documents and making an informed decision. You could expose your company to serious risk if you do not have all the information.
Virtual deal rooms allow you to share documents online in a broader variety of situations. This includes M&A, corporate financing, fundraising, joint ventures and insolvency. This allows for quicker and more efficient due diligence while reducing costs.
One of the most important aspects is the ability of users to safely view and review the documents and information they require. A robust set of security measures is the best approach to achieve this. This includes not only encryption of files but also secure access and a comprehensive log of all interactions.
Another crucial aspect is to have an organized structure to assist users in finding the files they require, and to ensure that the files are easily modified as the needs change. This requires the right file naming system that meets the due diligence checklist as well as having an approach to categorizing, ordering and indexing files.
Finally, it is important to have a section that contains all documents relating to intellectual property. This typically comprises all trademarks or brand names, slogans and logos that are owned by the company that is targeted as well as all capital assets, like real estate and machinery.