A virtual dataroom is a cloud-based solution designed to safely store and share confidential business data. They are often used during due diligence in mergers and purchases, however they can also be utilized for fundraising, IPOs or legal proceedings as well as any other project requiring the secure sharing of sensitive data.

During due diligence, the potential buyer will review all relevant documents in order to evaluate the company’s worth. This process was traditionally done in a physical space, however, it is now conducted online, using virtual data rooms. This makes the process easier and less expensive for both parties since they do not have to travel in order to review the files.

To ensure that potential buyers can easily find the information they need it is important to organize your data in a simple and logical manner. Create folders that are able to reflect the content of each document and clearly label them. This will make it easier for buyers to find the information they require and answer any questions that arise.

Make use of your data room to highlight the most important metrics and present an engaging story. Investors are likely to be looking over hundreds or even thousands of slides that contain rich data, and they’ll want to know that the data presented is in line with the larger investment concept. Avoid sharing information that is sloppy or unorthodox analyses that don’t provide value. For instance, showing only a small portion of your income and loss statements isn’t beneficial; instead, show the entire statement instead.

the purpose of data room m&a