The M&A process is a very delicate one in which you have to act carefully and at the same time decisively. During the transaction, you and your potential partners will need to exchange a lot of confidential information that must be securely protected from unauthorized parties. A well-structured data room can help you make things run as smoothly as possible, with its functionality allowing M&A parties to access the data they need in a completely secure environment. In this article, we will tell you how to use VDRs to build an effective and secure M&A process.

Draw a VDR chart before you begin

Before you start your M&A process, you need to stop and think about what your virtual data room should look like. That way you can speed up your workflows in many ways, but it also forces you to think about building your documentation structure: which documents you need to upload to the repository, and who needs to have access to them. Visualize your ideas somewhere on a piece of paper and use that draft as a reference point from which you will later navigate the online space itself. 

Assign access to the appropriate people

It’s important to find the golden mean at this stage, because as a rule giving access to a large number of users will make them more predisposed to your proposal and ensure transparency of your intentions, but on the other hand, if important information is made visible to a large number of people, this makes it more vulnerable and unprotected. 

Below are some guidelines to help you figure out how to proceed: 

  • Give limited access to buyers – Potential buyers shouldn’t have access to all the valuable data in the VDR, so don’t immediately trust and open all the cards in front of them
  • If you have a Human Resources folder, it should not be shared with any departments other than Human Resources and senior management
  • Incomplete financial or commercial transactions should be severely restricted, forwarding them to their customers is allowed, but the companies involved in the transactions should be hidden

Create a systematic file system

Once you have a clear picture of the look and feel of your VDR, you need to move on to the file system design. So, while creating the various legal, accounting, and financial folders, many data room solutions suggest including a master file that contains the documents that buyers need at the initial stage of creating the transaction. At the same time, you also need to separate the general documents from the secret ones, for this you need to create a folder with closed access for valuable data from the very beginning. This access can only be held by senior management and the buyer at an advanced stage.

Add and maintain up-to-date documents

Documents should be updated regularly because outdated data is not necessary to the M&A process. Not only is it useless, but it also clogs up your system and burdens its operation. We recommend that you perform regular general cleanings to avoid this. 

Constantly interact with VDRs

Do not let the value of your data room fade away, constantly interact with it and forever get rid of such problems as threatening the security of sensitive data during M&A transactions and other file exchanges. Run multiple processes in one secure environment for clearer and more structured work.