Data Room Due Diligence

When working with large volumes of sensitive data due diligence is crucial for all parties. Due diligence files are usually kept in cabinets which can only be accessed by those with physical click for info access. This method is not suitable for large amounts of data or multiple transactions. A virtual dataroom (VDR) allows a variety of interested parties to read sensitive documents and provide comments without the need to make copies that could expose confidential information. A VDR is commonly used to conduct due diligence on M&A deals, litigations bankruptcies, fundraising, and audits.

To facilitate the due diligence process, a VDR has a structure that is simple to navigate and organizes files according to their type or project stage. The structure of the folders can be altered to meet the needs of different projects and industries. The software usually comes with the default file index which corresponds to the due diligence checklist to assist users locate the needed files quicker.

The VDR should be equipped with all the security features required to ensure that nobody is able to access confidential information without authorization. This includes encryption of 256 bits remote shredding, dynamic watermarks, restricted viewing mode, secure spreadsheet view, in-depth activity reporting and antivirus protection. You should be able control how users can download and print documents, and also establish time limits for viewing documents. Different providers offer different flexibility in their security features, so be sure to check how they can meet your data room due diligence requirements before deciding on a service.