The key to creating a strong virtual data room is to have a structured and logical file structure, with distinct, informative folder titles. Users are able to easily find what they are searching for. It is also beneficial when documents are organized in an organized and consistent format (e.g. text documents in PDF format and financials in Excel) to simplify viewing the files as well as manipulating their contents.
Another important aspect is the granularity of permission levels that prevent leakage of documents and exfiltration. VDR software allows teams to be divided into groups based on the roles they play in due diligence. For example, “management” or “finance” can be granted access.
A VDR must also be user-friendly to all users, even investors and founders who may not be tech-savvy. The process of searching and navigating the VDR should be simple and take just a few seconds, similar to navigating a Dropbox. In addition, the tool should be able to work with non-proprietary formats of files and allow for easy collaboration with other parties.
The most powerful VDRs come with advanced features which streamlines and makes simpler business processes like M&A due diligence or the IPO process. For instance, a good solution is one that combines project management and a virtual data room in one with a powerful OCR engine to automatically read PDFs and other documents -an essential feature for M&A diligence workflows. The most effective solutions also provide 24/7 technical support to ensure that skilled professionals can be consulted on-demand when needed during critical transaction stages.
