The quicker you set up the data room, the sooner buyers can get started with a due diligence. Not using a data room, or a data room that is not easy to use, could have a detrimental effect on the deal process and speed for yourself or your client. Your organisation will also use a lot of the workday on internal admin and not on the most important task: Strategy and closing deals.
In this blog post, our Client Managers, Nina Felic and Bobo Tiger, will tell you about the smartest and fastest ways to get started with a data room in order to get the best possible outcome.
Here are ten take-aways to keep in mind when you have a tight schedule:
1. Good structure
It’s very important to have a neat and logical layout where you can easily find your way around. We recommend doing the following:
- Divide the documents into chapters so it’s easy to find the information you are looking for
- Add numbers to the chapters (they might be distributed to different people)
- The documentation also needs to be numbered, use the integrated index tool for this to save time
- If you have received a request list, not all folders may be applicable to your organisation. Visualize this by setting them as N/A directly on the folder, add placeholder or links if necessary!
There are usually advisers who help put a good structure in place, but we also have good templates that can be used if you are unsure about where to start.
2. Plan well
Have a good plan on how to complete a Q&A. Here are some examples of questions you should ask yourself:
- What kind of process are we about to enter?
- Are there many participants on each side or are there just a small number of people involved in this part of the due diligence?
- Can you carry out an open flow of information between the company and the counterparty?
The more complex the process, the more time you should spend thinking about how to carry out the process.
Here are some factors you should think about:
- Put in place a gatekeeper on each side – this allows you to allocate questions to the right person
- All answers need to be straight to the point, so buyers get the correct information when they have to make their decision
- Set up the questions under different categories so that those who are responsible for legal and financial issues, can more easily find their area of responsibility
3. Manage tasks efficiently
Distribute tasks using our new feature, Task Management. The purchasing team may comprise many different parties, and to get a better overview of where you are in the process, the project manager can now follow which documents have been reviewed and what remains with our new function. The various members also have a good overview of their own tasks.
Read more about Task Management.
4. Get a Clean Room in place
Enormous amounts of information are shared when a company is going to be sold or merged and much of this documentation is so sensitive that it cannot be shared with all parties involved in a due diligence. You can therefore create a Clean Room. This is a data room inside a data room, and it’s used to share information with very limited access.
Here’s how a Clean Room works:
- In the main room everyone has access to all information, while the Clean Room has limited access
- The seller gets a better overview of who has access to what and can report on the different rooms
Read more about Clean Room
5. Set up Secure Messaging
In a due diligence process the information is often very sensitive. It’s therefore very important to have a secure channel for communication for the parties involved. Secure Messaging is a hybrid between chat and email and allows users in the buying or selling team to send messages to each other. You can also attach documentation in conversations, so that you do not send this by email and risk sending to the wrong person.
Read more about Secure Messaging
6. Protect your account with two-factor authentication
2FA is an additional security layer used to ensure that only the right users have access to an online account. It’s one of the most effective security measures you can implement and should be considered mandatory for any account that has access to sensitive or business-critical information.
7. Gain insight through reporting
It can be helpful for administrators to retrieve reports with information about what happened during the process before closing the data room.
These reports contain documents on the following:
- Who has been most inside the data room?
- Which buyer team has looked at the information?
- What documents are being read?
These reports can be very important in the aftermath of a due diligence process in the event that disputes were to arise regarding which documentation has been shared.
8. Export – retrieve a copy directly from the data room
After the process has been completed, most people would like a copy of the content to save it for the future. You can order from us, but it can also be easily retrieved directly from the data room, at no extra cost.
How to export your data room documentation:
- Administrators choose the kind of content to include in the export
- Also include the administrator reports that you want and send them to the users who would like a copy
The copy accurately reflects the layout of the data room.
9. Subscribe to news and updates
To avoid missing out on news and updates, you should set up alerts to see if new information has emerged about the process. If you forget to check the alerts one day, you may miss a question or an important new document.
What do you do?
- Let us know that you would like to be notified and we will send you an email when something new has happened
- You can choose to receive notifications immediately after something new has arrived, or you can set it to come once a day or once a week
10. Use our Client Managers
Our Client Managers have many years of experience with setup and reviews of due diligence processes and are always ready to assist.
Client Managers can help with the following:
- Assist at start-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