Due diligence is the foundation of any transaction and requires thorough analysis of a wide range of documents. It can be a lengthy and tiring process for both sides. Traditionally due diligence was conducted in physical locations and involved sending hard copies of documents back and forth between the parties. Virtual data rooms have changed this by offering advanced functionality that allows parties to work more efficiently and safely on one platform.
In addition data room software allows for better organization and greater visibility of confidential files. Document management tools like automatic folder structure and drag-and-drop files upload, advanced document search, and logical index numbers permit users to find the information they need quickly. This significantly reduces the threat of unauthorized access to or sharing sensitive information.
Data room security features such as user impersonation, granular access rights and user impersonation provide a more control over who has access to which files. This ensures only the right people can review and work with confidential documents. Lastly, reporting tools enable administrators of the data room to monitor data room activity in real-time. This ensures transparency and effective management of access throughout the course of the project.
A virtual data room with project management capabilities can help make the M&A process – and particularly due diligence more efficient. For example, a VDR equipped with an in-built Q&A module enables legal advisers to centralize all documentation requests for buyers and communication which makes it easier for them to keep track of what’s been shared and when. It also means they can make informed decisions based on current and accurate information, avoiding any unpleasant surprises.
