You must prepare your company’s Virtual Data Rooms in advance so that the virtual data room is effectively organized, easy to follow and simpler to manage.Do all the hard work upfront if you want to avoid overwhelm later. Our 14 years of experience in the industry enables us to make the following recommendations:
1. Understand the nature of the due diligence
Is it a one-on-one or is it an auction? Where are the bidder located? How complex is the asset being sold? In all cases you will need to understand what the other side will require to start diligence and what you are willing to disclose in the preliminary stages. Often more and more data gets added throughout the life of Virtual Data Rooms because the company did not predict the external parties requirements in advance. When the external parties request for the data they need to continue the due diligence process your company will have to locate it, scan it and then uploaded. The delay could be avoided through pre-planning.
2. Collate the data in advance
Virtual Data Rooms make for a great central repository for companies because they are a great way of collating the relevant confidential information from each and every department. If you do have a central repository then collating another Virtual Data Room which is a subset of this central repository is much easier. All you need to do is identify the required documents from each department and then pull it out to reupload it into a new data room which is being designed specifically for the purpose of due diligence.
3. Use checklists
The use of checklists ensures that material information does not get missed due to human error. When there are thousands of files that you are dealing with, it is very easy to miss out on a few. Later on that error which can be perceived as negligible can come back to haunt you in the form of a possible litigation. Its best to take no risks by using checklists.
4. Involve your virtual data room provider
An experienced Virtual Data Room provider will not only save you time but also guide you throughout the process. Its best to ask your provider for samples index structures from your industry so that you can use it as a means to create a permutation of your own. Also don’t hesitate to get them involved in compressing large documents, converting them into more secure file formats and getting them to followup with users to ensure that everyone has got the access they were granted.
Conclusion
If you follow the above steps to prepare your company’s Virtual Data Rooms then everything that follows will be effortless. A well planned Virtual Data Room is one that is well thought out from the very beginning and takes the least amount of time to run. Get your dedicated Virtual Data Room provider to assist you throughout the life of the data room, especially in the initial stages. If the Virtual Data Room provider you are considering does not have a dedicated team to help you throughout the life of your data room then consider one that does!
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