In a world of high-stakes dealmaking, your data room needs to be ready for action at a moment's notice.
The quicker you set up the data room, the sooner buyers can start the due diligence process. Using a data room, especially one that is easy to use, benefits the deal process, speeding it up for yourself or your client. A data room also means your team spends less of their time on internal admin to focus on crucial tasks such as strategy and closing deals.
In this blog post, you'll discover the smartest and fastest ways to get started with a data room for the best possible outcome.
It’s never too early to prepare for your next due diligence process. A preparation portal eases the process of gathering and organising the documentation needed.
Simply put, a preparation portal is a data room only accessible by your team and trusted advisors. Since an external third party doesn't have access to it yet, you can upload and organise information at your own pace to be ready for the next due diligence phase.
A full data room is the same environment, but at this point, you have invited prospective buyers or investors to access its contents. With unlimited data volume capacity and internal users, a preparation portal is easy to set up. You can also automatically upgrade to a full data room as soon as you invite external parties to access it.
The benefits of a preparation portal include the following:
It’s so important to have a neat and logical layout so that it’s easy for deal teams to find the information they need. We recommend the following:
Your advisors can help you establish a good structure, but Admincontrol also has templates available if you are unsure how to organise your material.
Distribute tasks using our new task management feature. The purchasing team may comprise of many different parties, and to get a better overview of where you are in the process, the project manager can use task manager to follow which documents have been reviewed and what remains. Team members also have an overview of their own tasks.
Data room administrators are task managers by default, but they can also assign task management roles to other users. However, the administrator will also have an overview of every task and can choose to see their own tasks or those assigned to others.
To get started:
Assign a task manager role. A task manager role speeds up task delegation and supports a smooth flow of information. Any data room user can be designated as a task manager.
Subscribe to notifications. Get the latest updates on new tasks and changes to task status so you always feel in control.
Use the task overview. Easily track which documents have been viewed by internal or external users to stay on top of deadlines and keep the deal process moving.
When a company is going to be sold or merged, enormous amounts of information are shared. Much of this documentation is so sensitive that it cannot be shared with all parties involved in due diligence. In this case, you can create a clean room. A clean room is a data room inside a data room with very restricted access.
In the main data room, everyone has access to all information, while the clean room restricts access to a smaller clean team. This clean team usually consists of the data room administrator and some of the buyer’s advisors. A clean room means the seller gets a better overview of who can access what and can report on the different rooms.
Examples of the information you might store and share in a clean room include trade secrets, information that could give competitors an advantage if the deal fails to close, or commercially sensitive information that could jeopardise compliance with antitrust laws.
It's important to have a detailed plan for managing the intensive Q&A phase of a deal. To get started, consider the following questions:
The more complex the process and its goals, the more time you should spend thinking about how the Q&A phase can be managed efficiently.
Here are some factors to consider:
Reporting enables administrators to review the deal process before closing the data room. These reports contain information on the following:
These reports can be critical in the aftermath of a due diligence process if disputes come up regarding the documentation.
After completing the deal process, most organisations would like a copy of the data room’s contents to save for future reference. The exported copy should accurately reflect the layout and contents of the data room.
Two-factor authentication (2FA) is an additional security measure that ensures only the right users can access an online account. 2FA is one of the most effective security measures you can implement and should be considered mandatory for any account or user with access to sensitive or business-critical information.
To stay up to date with progress, set up alerts for status updates or changes during the process. Alerts will ensure you don’t miss a question or an important new document.
How to set up alerts:
Our client managers have many years of experience with data room setup and the requirements of due diligence processes. They are always ready to assist.
Client managers can help with the following:
Assist with data room set-up
Help with questionnaires
Onboarding/training sessions
Customise the data room for each individual customer
Identify important issues before inviting potential buyers
Check that everything is set up correctly in the data room before opening it
Are available throughout the process if any questions should arise
At this point, you should have a data room that has been set up with a minimum of stress but most importantly, one that reflects best practices in managing and progressing today's complex deals and transactions.
Whether you intend to use your data room for a merger, acquisition, fundraising round, or as an ultra-secure document storage and sharing solution, it is worth investing time in setting it up optimally. Using this ten-step approach will ensure it fulfils your requirements as an essential tool for optimising the deal process.
Ready to get started?
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