How to Set Up a Data Room Right

A data room is a vital tool in a variety of business situations that require professional and secure document exchange. It can be utilized in M&A transactions, financings as well as legal proceedings, IPOs and other projects which require a due diligence process in conjunction with external parties. To make your virtual data room as efficient as it is possible in the scenarios mentioned above, you need to take the time to set it up right.

In the beginning, you need to decide who has access to your documents and how they can use it. It’s important to limit the number users as you don’t want to allow anyone to see your documents. However, too many users can pose a problem also, so it’s essential to data room providers find a balance that works for your scenario.

It is then necessary to create a hierarchy of folders that makes it simple for users to locate information. This can be as simple as using clear and consistent name for folders or providing detailed metadata with each document. Also, keep in mind that certain information might only be relevant to specific individuals. This is why it is worth the time to group files together.

Once you’ve completed the structure of your data room it’s time to start uploading the actual files. Most platforms let you define permissions, allowing you to grant different individuals access to various files. You can, for instance allow certain investors access to their view, but give others full access. You can also limit downloads to ensure that unauthorized third parties aren’t stealing your precious information.