Due Diligence

When documents get involved in the workflow, all processes become more complex as participants need to manage the papers. But technologies are always on the duty to simplify our lives and remove all the hassle. If you’re interested in how tech can solve existing problems related to document-heavy business processes, stay with us — this article will tell you about the ultimate tool.

What is a data room due diligence?

A virtual data room for due diligence is a service that allows companies to upload, manage, share, and collaborate on documents. This might sound like a generic cloud storage we’re used to, but a data room is a more complex tool that’s suited for the needs of businesses.

What are the advantages of a data room?

A data room for due diligence is an ultimate business instrument that can simplify not only due diligence but other document-related processes as well. Let’s take a look at the benefits you’ll get once you adopt this tool.

Security for your files

Holding due diligence in a data room you can be sure your documents are safe. Leading providers use bank-grade encryption to protect the files and data transfer ways. Also, there usually is two-factor authentication that will keep unauthorized users away and eliminate a human mistake. Additionally, most vendors will also provide you with such tools as watermarks and fence view that let you protect your information even better.

No data leaks

Both you and your provider will be defending your information from the leakage — the vendor protects it with encryption, and you can add two-factor authentication and use other safety functions. Also, since you have control over who can see and work with files, you can be sure the information won’t get into the wrong hands. And as an administrator of a data room, you’ll see the activity of all users — therefore, you can spot some suspicious activity.

Convenience

To begin preparing for the due diligence in a virtual data room, you need to upload files — usually, it’s easily done with a drag and drop feature that allows you to upload documents in bulk. If you already have a structure of folders on your computer, you can preserve it uploading files to your data room. Once all documents are in the repository, you’ll only need to do some final touches and make sure everything is organized — then your data room is ready for other participants of the process. Simply invite them to the workspace — you will be able to control who can access, edit, share, and print files.

High accessibility

Most top providers make their data rooms suitable both for desktop and mobile devices. Therefore, you and other participants of the due diligence process will be able to access files even on the go — they’ll only need their smartphone or tablet and internet connection. Data rooms don’t limit mobile users in features, so everyone will feel comfortable.

Improved collaboration

As all participants of the due diligence process have access to all the necessary files, and they can leave comments there to clarify details, the workflow becomes smoother as the communication gets better. Also, virtual data rooms offer tools like a Q&A section where sides can get answers to their questions and keep all the information in one place. Finally, you can set up notifications so that all users are alerted when some files are uploaded to the data room, or existing documents are changed.

Which industries can use data rooms for due diligence?

As all participants of the due diligence process have access to all the necessary files, and they can leave comments there to clarify details, the workflow becomes smoother as the communication gets better. Also, virtual data rooms offer tools like a Q&A section where sides can get answers to their questions and keep all the information in one place. Finally, you can set up notifications so that all users are alerted when some files are uploaded to the data room, or existing documents are changed.

A due diligence data room checklist

Here are the key criteria you need to keep in mind when choosing a data room provider:

01
Does it offer the certificates you need?

Companies from specific industries might require special certificates.

02
Do the features fit your needs?

Make sure the data room offers all the functions you want to have.

03
What about the price?

The costs should fit your budget. The price usually depends on how advanced a data room is and on the popularity of a provider.

04
Does it support the platforms you need?

The best vendors make their software suitable for all devices, but you still should check this criterion.

05
What are the reviews?

Look for both professional and customer reviews to be aware of all pitfalls.

The best data room providers for due diligence

You don’t need too many features for this business process, so it’s better if the service is not overloaded with functions you won’t use anyway. Of course, each business has its unique needs, and, consequently, looks for different things choosing a data room. Yet, we can name some providers that can satisfy the expectations of most companies: