When you are looking into a virtual data room, it’s best to look for companies that provide key security settings, user management tools and reporting. The more advanced features that a company provides, the higher their chance of meeting your needs and reducing due diligence time and costs.
A data room is a secure repository for hosting sharing and archiving of business documents including emails, notes, and more. They can be utilized in mergers and acquisitions joint ventures, fundraising and initial public offerings (IPOs) and also in legal instances.
When choosing a data-room service, you should research recent user feedback on various review platforms. Check for testimonials that explain how the software handles different types of documents and whether it can meet specific document requirements. Select a vendor that offers both advanced and basic capabilities in one place.
Investors may request documents during the due diligence process. The requests are typically executed in two stages. Stage 1 is the first stage that includes information for a termsheet, such as your pitch deck, market/product fit, financial models and cap table. Stage 2 is a full due diligence checklist that contains detailed information on the company’s documents, securities-related documents and material agreements.
Many companies offer granular file permissions that allow you to create different levels of access for users. This is particularly helpful when you need to allow third parties to view the sensitive or confidential files you have. You can, for instance set viewing and downloading rights for specific folders or subfolders. You can alter these permissions if needed.