What to Look For in a Financial Data Room
A financial data room (FDR) is a system for sharing and storing sensitive data in a safe environment. It is often used during M&A, IPOs, capital raising and other investment banking processes. The data stored in the virtual data room may be anything from private documents to spreadsheets and presentations. Participants in the process have the capability to view and edit documents, while third parties can only access them. This eliminates the risk of theft of information.
If you’re thinking about a financial data room, you should look for one that has project management capabilities that will streamline the deal making and investor reporting process. These tools make it easier for investment bankers to collaborate with sellers and buyers and increase transparency throughout the entire transaction. It is essential to think about an arrangement that includes the use of a flat-rate that does away with the requirement to charge per page, which can quickly add-up during large transactions involving multiple stakeholders.
In addition to the project management features, look for a financial VDR that provides the ability to control version. This feature lets you determine who is able to view the latest version of the document or allow users to have read-only access (without the possibility of making changes). This can speed up diligence significantly, and prevent confusion over what version of a document is being viewed at the moment. It is also helpful to have short messaging or commenting features built into the software so that it is easy for investors to send a message or make comments without leaving the data room. Additionally, search for a data room that provides real-time analytics, which can help identify the most popular documents, as well as other areas of concern.