Setting Up a Data Room

The first step in setting the data room is to establish the storage requirements for your files. You can then decide whether a physical or a virtual data room is the best option for your company. Choose a service that offers the features you require like drag-and-drop, watermarking and audit trails.

Once your data room is up and running it’s time to start organizing your documents. To ensure that users locate the information they require organize your files in a folder-based setting up a data room or table-based structure and use an easy-to-use indexing tool. A well-organized document structure also allows you to easily track and compare different versions of a document, which is especially helpful when working with multiple collaborators.

If you are using data rooms to communicate with investors, consider including previous investor updates in the data room. This will show investors that you’re open to communication and transparency, which can boost your trustworthiness during the due diligence process.

The final point: If you’re using your data room to conduct due diligence or to raise capital, you must follow a due-diligence checklist. This will help you prepare for a review by the buyer and ensure that sensitive information doesn’t get into the wrong hand. Before reviewing any files, it is important to have all potential buyers agree to the non-disclosure (NDA) agreement within the data room. This will lower the threat of intellectual property theft and data breaches, which can occur when sensitive information is shared through unsecure methods such as email or file sharing websites.