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What to Look For in a Financial Data Room

A financial data room (FDR) is a platform to store and share sensitive information in a secure environment. It is frequently used during M&A, IPOs, capital raising and other investment banking processes. The data that is stored in the virtual data rooms can be anything from private documents to spreadsheets and presentations. Participants in the process have the capacity to view and edit documents while third party users can only view them. This eliminates the risk of data theft.

When selecting a financial dataroom, choose one with features for managing projects to simplify the deal-making process and report-to-investor processes. These tools will assist investment bankers work with vendors and buyers to improve transparency during the entire deal. It is also important to consider a flat-rate price structure that eliminates the necessity for per-page pricing which can quickly become expensive during large transactions with multiple parties.

Look for For a VDR with version control, as well as features to manage projects. This feature allows you to define who can access the most recent version of a document or give users read only access (without the ability to make changes). This feature will speed up diligence and avoid confusion over which version of the document is being viewed. It is also useful to have a short messaging or commenting capability built into the software to ensure investors can send a message, or leave comments, without having to leave the data room. Also, look for a virtual data room with real-time analytics. This can help identify the most popular documents as well as other areas of concern.