Creating a Data Room for Business

A data room is an online space that allows you to safely share confidential data and files with other parties. Commonly used in mergers and acquisitions, due diligence, and fundraising, the platform facilitates safe information exchange and stops sensitive documents from falling in the inappropriate hands.

The most effective data rooms have a clear folder structure, and an index that lets users locate information by the topic or file name. Some allow for the control of version numbers, which means that everyone is using the most current version of a file and can easily track changes. PandaDoc, a popular provider of storage for data, offers all of these features aswell as custom tracking and analytics watermarking downloaded documents, and a cyber secure environment.

The first step in creating an data room is to decide which documents will be included. Typical areas include legal (Articles of Association, IP registrations), financial (profit and loss statements and balance sheets), and company documents and a current cap table that clearly indicates who owns what share of the business. It is important not to provide extra information that are not standard, like non-standard analysis that aren’t relevant to the current or future performance of the business. Furthermore, it is recommended to keep a list of users who are given access to the data room in order to make sure that those who no longer require access are removed, and that permissions are up-to-date for those who do. This will ensure that only the most current and relevant information is accessible to be viewed.