Setting Up Your Data Room – The Essential 5 Steps

Setting Up Your Data Room – The Essential 5 Steps

For first time users, setting up a data room may seem like an intimidating task. Here is a five-step process to ensure that your set up is smooth and quick.

1. Appoint a project manager

A project manager is responsible for coordinating the data room, from ensuring that documents are uploaded to setting user access rights. A typical M&A transaction would consist of the buyer and seller teams and their respective legal and financial advisors, tax consultants, etc. For a sell-side M&A, a financial advisor could take on this position and manage the documents and also communication with bidders in the data room. When the deal is closed, the data room will be archived and a complete audit trail of disclosure available to the client.

2. Prepare your non-disclosure agreement (NDA)

To access a data room, all users are required to agree to the NDA which governs the usage of the data room prior to being able to access documents. Either prepare your own NDA or use the Docutone NDA template provided as a default.

3. Set up your document index structure

Data room indexing structure varies by type of transaction and industry. Docutone offers a quick-launch virtual data room with populated folder structures for the project manager to get started quickly and easily when importing corporate documents. See sample index set up:

4. Organize users and determine access permissions

This critical stage is where you handle the document control in relation to your index structure. Organize users according to their companies and/or roles, then assign permissions. Once this stage is completed, we highly recommend the project manager to verify assigned permission sets by logging in to the data room as a participant.

Assigning permissions means more than just restricting access. Disable copying, sharing, printing and saving in permissions management.

5. Assign Q&A lead handlers

In project transactions, Q&A (questions and answers) questions regularly arise in relation to documents disclosed for review in a data room. In such circumstances, it is pertinent to assign users Q&A roles, i.e. ‘questioners’, ‘answerers’ and ‘lead handlers’ as users get on to the Q&A forum to send out questions or receive, review and address answers in throughout the course of the deal’s lifecycle.

It typically takes just one deal to get familiar with the process of setting up a data room for project transactions. With this in your pocket, your deal team will be on the way to securing a professionally branded and easy-to-use data room to managing the due diligence process.