Virtual data rooms are the latest standard for sharing sensitive information with investment banks, investors and other stakeholders.
Making sure that your files are organized and have a clear document structure is vital to data room success. It allows users to find information quickly by presenting documents in a clear and organized way. This can be accomplished by separating files into folders and using a consistent naming convention to avoid confusion. Documents can also be indexed to offer additional search options. Additionally, version control is used to track changes and ensure that the latest version of a file is always accessible.
It is essential to think about your audience when constructing a data room structure. Your due diligence audience will likely be lawyers, banks and financial advisors and financial consultants, so it is crucial that you arrange your documents in a manner that is logical to them. You can achieve this by creating multiple top-level folders to cover every stage of the transaction, and subfolders that further organize specific topics.
A well-organized system can drastically reduce the time investment banks and other parties take reviewing documents and thereby making it easier to close the deal. It is also crucial to make sure that all your files are up-to-date and formatted correctly. A VC who reviews a number of different companies’ documents each week isn’t going to be impressed with an unorganized data room.