The first step in setting up a data room is to establish your file storage needs. Then you can determine which type of data room is best for your company. Then select a provider that offers the features you require to meet your needs like user permissions, drag-and-drop watermarking, audit trails.
Once your data room is in place now is the time to begin organizing your documents. Organise your files with the use of a table, or a folder structure to help users to find the information they are looking for. Utilize a clear indexing system. A well-organized structure for your documents allows you to easily monitor and compare versions of a file. This is especially useful when working with multiple collaborators.
Take into consideration including any previous updates on investor information in your data room, if you use it to communicate with investors. This will demonstrate to investors that you are open to transparency and communication, which will boost your credibility during the due diligence process.
Final note: If using your data room to perform due diligence or raise capital, you must follow a due-diligence checklist. This will help you prepare for being reviewed by the buyer, and ensure that sensitive information doesn’t get into the wrong hands. It is also important to sign a non-disclosure agreements (NDA) within the data room. Make sure that all prospective buyers sign it prior to reviewing any documents. This will lower the risk of intellectual property theft and data breaches, which could occur when sensitive data is shared via unsecure tools such as email or file sharing websites.