How to set up your virtual dataroom software depends on how you intend to use it.
Modern-day virtual data rooms serve different organizational purposes. For example, many businesses use them as their primary database to manage their routine document sharing or storage needs.
At the same time, businesses opt for a virtual data room service for initial public offerings, mergers, acquisitions, fundraising, joint ventures, and similar business transactions.
But no matter what you need a data room for, you can set up the data room in three easy steps and make little adjustments as per your requirements.
The text to follow is a brief introduction to an electronic data room, how to set it up, and what are some of the best virtual data room providers.
What are virtual data rooms?
Virtual data rooms, in very basic terms, are electronic document repositories for efficient data storage, sharing, and management. Electronic data rooms are globally used to streamline corporate data management, digital communication, and dealmaking.
Most importantly, online data rooms are not a simple cloud data repository — they are comprehensive business solutions.
For example, there are free data storage solutions like Dropbox, but the level of security and number of document features vary greatly. In addition to that, high-end data rooms have communication and deal management tools that you will not find in orthodox data storage solutions.
In a nutshell, virtual data rooms provide:
- Data security
- Faster communication
- Easier deal management
- Document access control
- Safer file sharing. Read more about data room file-sharing features at https://www.idealsvdr.com/blog/virtual-data-rooms-file-sharing/.
3 easy steps to set up your virtual data room
Before setting up your data room software, it is vital to choose a good virtual data room vendor based on your needs. For example, if you need a data room for due diligence in M&As, IPOs, capital raising, or larger transactions, then consider options like DealRoom, iDeals, FirmRoom, Merrill, and Caplinked.
On the other hand, if you are looking for a cheaper data storage solution for the longer term, try Box, Google Workspace, SecureDocs, etc.
However, it is highly recommended to never compromise on security features, including:
- Two-factor authorization
- ISO certification
- Access permission settings, and
- Audit logs
Here are three easy steps for setting up the data room.
1. Create user groups and add users
Whether you use data room software for due diligence or regular data management, it is better to create different user groups. User groups give you more privacy, and it is easy to manage data room users.
Here is how user groups can help you in different cases:
- Due diligence. During mergers and acquisitions, sellers or target companies often deal with multiple buyers simultaneously. Some of them may leave after the pre-due diligence stage, while some may continue the trade.
When you create different groups for different buyers, you can communicate privately, share documents as per the scope of the deal, and get the best quotation from multiple buyers.
- Regular use. Creating user groups for regular data management is also beneficial in multiple ways. You can create different groups for marketing teams, HR, finance, taxation, customer support, etc. No user from one group can access data from another group or communicate with them unless you allow it. You can rename, delete, and copy user groups.
2. Set access permissions
Even when you create groups, you would want customized access levels for users in them. You can set different permission settings for your groups and the users inside them. Common permissions include membership, admin, folder/file, and more.
In addition to that, there are usually four types of file access permissions that you can use according to your needs.
- View — data room users can only view the document that generally has a digital watermark.
- Download — users can print or download the files with watermarks.
- Download original — it allows users to download, view, and print an original document
- Edit — users can overwrite, change, alter, rename, delete, and move these files.
You can edit or change permission settings whenever you want. The “view only” or “download” settings are handy during due diligence. Apart from that, the admin in the group can restrict any individual user from accessing a folder, file, or page in the document.
3. Add documents
Once you have completed the permission settings, you can upload documents in your desired structure. If it is an M&A data room, create a due diligence checklist (or follow the ones provided by your vendor).
You can create folders, subfolders, and even sub-sub folders as needed. Generally, all standard data rooms have features like bulk upload, drag-n-drop, built-in document view, etc. for easy and fast document uploading. Some data room software like iDeals convert text files into PDF to make file viewing simple.
Some of the best overall data rooms include iDeals, Ansarada, Intralinks, Digify, and ShareVault.
Setting up your data room correctly is important to utilize it in the best possible manner. You can start by choosing a good data room vendor, creating user groups, setting access permissions, and uploading documents in your desired structure.