If a business has to share sensitive information with other parties, a data room system allows users to keep that information safe and only reveal it to those who require to see it. This is typically used in mergers and acquisitions (M&A) transactions but it can also be utilized during fundraising, IPOs, legal proceedings, and more. If you’re thinking of using a data room, you need to know how to use one to make the most of your investment.
Decide what kind of documents and files you’ll need. Then, organize the documents and upload them to the data room. Create an organized folder structure using obvious categories, for example legal documents and financial documents. Within each category, you can add virtual data rooms for project management subfolders to further categorize documents. This will allow stakeholders to find the correct document quickly and will avoid confusion.
Consider the kinds of users that will be using the data room. Consider the roles of the users and the degree of access they’ll require. For instance, administrators may need access to the entire data room, while investors may only need access to the financial statements as well as other documents relating to investments that could be made.
Make sure that the file names and titles are consistent and descriptive to help users to navigate the room. Consider adding a background or a summary to each document as well. This will help users better understand and contextualize the file. Also, establish a process to eliminate outdated files from the data room to reduce security dangers.