When people think of data rooms as due diligence, they imagine merger and acquisition deals involving companies sharing information with other parties in a controlled manner. However, due diligence data rooms can be used by lawyers in the process of preparing cases or sharing information with co-counsel or opposing counsel in litigation proceedings. They can even be used by investment bankers to use to securely share information with potential investors or underwriters when it comes to capital raising and IPO preparation.

It is essential that all files and documents are uploaded and prepared prior to inviting third parties to the portal. A pre-planning time can be beneficial to organize and upload documents in a structured manner without the pressure of deadlines. After the main due diligence process begins the granular access permissions for each user can be set for each user. Access to folders and documents can be revoked or suspended at any time.

The structure of the folders in a data room for due diligence must be well-organized with a clear and concise name for each file or document. A well organised folder structure can make it easy for users to find the information they’re seeking. It’s also useful to include the ability review Unpacking the Potential of Virtual Data Rooms to search for access to documents. Some VDR providers such as FirmRoom offer pre-designed diligence folder structure templates which can be uploaded to automatically create a simple and efficient directory for your users.