What is a Deal Room Structure
The logical and correct structure of the virtual data room allows businesses to get the most out of using virtual data rooms. But what is such a structure?
It’s a well-organized hierarchy of folders and files that allows both employees and third-parties who are dealing with your documents for the first time to find the required file as quickly as possible. Then the collaboration will be easy, and you will be able to close the deal fast and without any hassle.
The lack of structure eliminates all the benefits virtual data rooms bring. That’s why it’s important to establish one. You should choose the type of hierarchy depending on your goals and a kind of a deal you’re getting ready for. Usually, businesses use data rooms for:
Mergers and Acquisitions
and much more
The perfect structure would be the one that will let all the advantages of your company unfold before the eyes of the viewer and provide them with the required details.
How to Choose the Right VDR Structure
Sometimes, business owners understand by themselves which structure is suitable for their goals. Many companies already have all their documents organized on the local machines. In this case, all you need to do is to upload all the files in bulk — the data room will preserve the structure.
If you’re not feeling confident enough to create the structure by yourself, you can ask your data room provider to help you out. The best vendors are ready to support customers at each step. Moreover, providers often already have ready-to-use M&A data room templates that will become a straightforward guideline for you. These templates are usually tailored for different needs and deals.
How to Organize an Online Data Room
Following simple steps, you can easily organize your data room and prepare it for efficient teamwork.
Install a Data Room
The first step would be the installation of the software. However, a lot of providers offer cloud-based data rooms now that don’t require you to install anything. If that’s your case, simply create an account for your company.
Come Up with the Structure
Depending on the goals of the upcoming process, determine the documents you will need to provide third-parties with. Then think through the most convenient structure for these files — you can use a template provided by your vendor as well.
Upload the Files
Now when you know which files to use for the upcoming process, upload them to the data room. If they’re already organized on your computer, you can upload them in bulk to transfer the existing structure, too. At this point, your goal is to get all the most important documents together and create a hierarchy of folders. Later, if you will need to add more files, it will be easy for you to do.
Set Up the Access Levels
Data rooms allow businesses to give different users different rights. You often can set up access levels even down to single files to make sure that third-parties can view or work with necessary documents only. It’s logical to give invited users access just to general information at the beginning of the deal and then gradually extend their rights.
If your data room provider allows customizing the invite email — you should leverage this feature to create a solid impression. Then send these emails to all the third-parties that will take part in the upcoming process.
Control the activity
Data rooms allow businesses to see all the activity of invited users — which files they opened, when, what they did to them, and for how long they worked with them. These reports can provide you with useful insights on how to get the results you desire. But also, using them, you can control the processes to avoid data leaks.
What Should be Included in a Data Room
Here is a generalized list of kinds of documents you should include in your virtual data room:
Basic papers — these documents include your business licenses and permits; a list of directors, officers, and subsidiaries; the percentage of ownership; other papers that indicate that your company is operating properly and legally.
Stocks, options, and other securities — these papers include all the information regarding current stockholders and option holders, the terms and details of stocks and options, and so on.
Finances and taxes — make sure you include papers that will show third-parties transparent information about your finances, taxes, loans, and leases.
Your property and assets — gather documents on all the leased and owned property and assets.
Intellectual property — these papers will show third-parties all the information about your patents, trademarks, software licenses, and all the other assets regarding IP.
Agreements — gather agreements between your company and suppliers, customers, and all other third-parties.
Insurances and information about employees — upload everything regarding insurances, the number, and roles of employees, agreements, and plans.
Supporting papers — if you feel like you should include any documents that can impact the deal, gather them, and add as supporting papers.
Data rooms are essential if a business wants to keep its documents safe and accessible, and close deals successfully. Although the lack of structure will neutralize all the benefits of this software. That’s why you should create a logical hierarchy and organize files before inviting third-parties to your data room. Then it will be easy for them to navigate through the information.