Building a Data Room Structure for M&A Success

Virtual data rooms are the newest standard for sharing sensitive data with investment banks, investors and other stakeholders.

Making sure that your files are organized and have a clear document structure is vital to data room success. It allows users to locate the information quickly, by presenting files in a logical, orderly way. To avoid confusion it is possible to organize files into folders. Documents can be indexed to provide additional search options. Version control can also be used to monitor changes and ensure the most recent version of a document will always be accessible.

It is important to consider the audience when constructing a data room structure. Due diligence audiences are likely to include banks, lawyers, financial consultants and other professionals. It is therefore crucial to arrange your documents in a way that they are logical to them. You can achieve this by creating multiple blog top-level folders to cover every phase of the transaction as well as subfolders that further organize specific subjects.

A well-organized structure can significantly reduce the amount of time investment bankers and other parties spend looking over documents which can make it easier for you to close a deal. It is also important to make sure that your files are up-to date and formatted correctly. A VC who is exposed to a variety of documents from companies every week will not be impressed by messy data rooms.