7 Steps for a Secure and Easy Virtual Data Room Setup

As the worldwide market for virtual data rooms is expected to continue its steady expansion and reach USD 5.6 b. by 2029, business owners use data room software for the following purposes:

• Safe storage of valuable files 
• Secure sharing options
• Seamless project management. 

A virtual deal room provides an ultimate solution for M&A mergers and acquisitions by safeguarding quick and secure document sharing.

What’s the financial implication? 

While most M&A data room providers apply per-page pricing structures, the price depends on the value, scope, and duration of the M&A transaction. The best-fit option is to compare virtual data room prices to secure an optimal subscription package and opt for a reliable VDR provider.

Although virtual data room platforms are providing multiple benefits, you should account for the apparent drawbacks:

• Complex use
• Restricted customization
• Internet access reliance. 

For these reasons, setting up a good data room is just not enough. You should pursue a trusted VDR provider with an impressive track record.

How to set up a data room?

Before setting up a data room, here are valuable insights on how to prioritize your strategic goals and explore essential features and functions of the virtual data room providers.

Prepare your files and documents

Prior to structuring a virtual deal room, arrange all important documents and files. During data room preparation for different deal stages, you’ll cope with physical and electronic documentation.

Below are suggested practices for processing documentation:

Utilise a data room index (table of contents) to arrange all of the accessible information and organize all of the VDR documents to ensure agile data room management. Streamline your VDR process by organising all of the paperwork pursuant to non-disclosure and sequence requirements.

Making decisions on the sequencing and secrecy of the data at an early stage will save you precious time and effort before you start setting up the data room.

Once you’ve completed preliminary arrangements for the VDR setup, here’s how to setup a virtual data room.

7 steps to set up a virtual data room

Still unsure how to choose the best-fit provider for your company’s operations?

Here is our VDR services guide to ease your VDR setup journey.

Step 1: Register your account

Start storing your intellectual property documentation in an organized data room by registering with a VDR service provider. 

While the registration differs from one service provider to another, the process is quite straightforward and consistent. 

To register your account, follow these steps:

• Provide your name, email address, and business information.
• Agree to the terms and conditions by checking the box that says “I agree to the terms and conditions.”
• Generate a strong password and supplement it with robust security features such as a security question or alternative two-factor authentication and multi-factor authentication methods to reset your password.
• Provide your mobile phone number in the appropriate format, if required.

Trusted VDR providers like Datasite put a lot of emphasis on client privacy and never share important documents or information about users with third parties. Datasite ensures user-friendly account registration by suggesting relevant apps for businesses, startup data rooms, and personal use.

Step 2: Create user groups

How to create groups and add members

Most virtual deal rooms provide two distinct categories of user permissions.

• Administrators. Virtual data rooms are completely under the administrators’ control at all times. Additionally, they can examine activity statistics, adjust permissions, and invite people.
• Administrative privileges restricted. Restricted administrators are only able to access the limited controls. The restricted mode is beneficial when you allow third-party access to certain features.

Select user groups subject to restricted administration. Only administrators may examine or modify the permissions of the selected participants and grant them access to activity reports.

What types of users exist?

• Collaboration users can view essential documents allowed for their group and submit notes to files or folders. They have restricted access to the data room to collaborate with other user group members. 

If you want these users to connect with you, we suggest granting them a Q&A privileged status so that they can pose questions during the Q&A sessions.

• Individual users. Data room security features restrict user access. Once granted permission by Q&A coordinators, individual users will see authorized documents, create private notes inside files and folders, and view reports on their activities. Advanced security features and degrees of access are allowed to users who hold higher positions within a corporate department or those affiliated with an external agency.

By leveraging the Caplinked data room user group settings, you can create user groups and set permissions for users to enter a secure data room workspace and review sensitive documents.

Step 3: Invite users

How to invite users?

Follow these steps to invite new users to your virtual data room:

1. You have to click on the “Invite button” user.
2. Set a group for new members by clicking on the “New group” option.
3. Issue invites to a newly established group as well as to an existing group in bulk or individually.

How to edit profiles?

1. Select the user whose profile you want to change.
2. New settings will appear which you can change.

Note that some user profile settings (email addresses and other personal data) cannot be modified. Still, you can change investor data room access permissions for potential investors. 

With the Intralinks VDR, you may add multiple users simultaneously or import users from other data rooms by inserting their emails and setting their roles.

Step 4: Set access permissions

To finish setting up your data room, upload your company documents into the layout you made.

Types of user permissions

• Set by groups. The “Set by groups” option will show you which groups have been granted access to certain files or folders.
• Set by folders. The “Set by folders and files” option lets you choose who can see your private information. The VDR Firmex provider lets user groups and individual members set permissions for files and folders, as well as subfolders.

Step 5: Remember about NDA

Sign a non-disclosure agreement (NDA) with a party with authorized access to a dedicated data room before sharing any files with them. 

This way, you’ll ensure a high level of security for confidential legal documents accessed by non-affiliated third parties.

The non-disclosure agreement (NDA) is a contract that prevents involved parties from disclosing privately held information. When you and your business partners sign an NDA, you agree not to disclose any of the material discussed within the VDR. Everything from client information to trade secrets applies.

Should you or any of your business partners violate NDA provisions, legal consequences will occur. We recommend uploading files to a virtual data room with caution and keeping confidential information from public view.

When selecting an effective data room, double-check that your trusted vendor deploys a solid security architecture to protect your deals and financial projections from unauthorised access and data breaches. 

Step 6: Upload documents

If you need to add specific documents to your virtual data room, the drag-and-drop user-friendly interface will ensure a seamless VDR experience.

You can also add files to the virtual data room by using a standard add-on tool or by copying and pasting the URL.

Make sure you are adding the documents in the right formats to the appropriate location inside the VDR system.

Which formats could be added to data rooms?

How to upload documents to the virtual data rooms?

1. Proceed to the “Upload” page once you have logged into the VDR to upload the document.
2. Click the “Choose File” button.
3. Go through the directories to locate the necessary file.
4. Click the “Open” button.

File organisation is important, so make sure to organise all the files correctly for the best virtual data room experience.

Step 7: Double-check everything

Before uploading the documents to a virtual data room, verify them for possible security threats. 

How to prevent data room setup problems:

• Verify that all files are free of viruses.
• Before uploading, make sure to take out any private information that includes social security numbers or bank account information. 
• Leverage the redaction function integrated in most virtual data rooms to conceal sensitive data while sharing.
• Make sure that the size and format of all the files are correct.
• Make sure that the titles of the documents are correct and provide useful information.
• Upload the files in the appropriate sequence.

These must-have precautions will safeguard your confidentiality and privacy.

Before you start actively using the virtual data room software

Just before you start setting up your virtual deal room, here are three more bits of advice that will help you get the most out of the process:

• Do not opt for widely used cloud storage options. Even if the majority of cloud storage is safe enough to store sensitive data, it may lack diverse functionalities essential for efficient and prompt file sharing. For optimal use, target specialised data room software.
• Use the “View As” tool when you’re ready to invite people to make sure that each person has the right access rights. “View As” will also help you figure out how well the VDR subscription plan you chose is working.
• Strike a balance between simplicity and safety. Trying to apply rigorous safety precautions to every object in the deal room might slow down the procedure and exhaust VDR participants. Put yourself in the position of the individuals in charge of a thorough due diligence process and make it easy for them to traverse the room, yet protect sensitive information properly.

The virtual data room setup checklist

Your virtual deal room is ready to launch in just a few simple steps: 

• Make sure that all of the papers and documents are prepared and organised beforehand.
• Locate the software for the virtual data room that is customised to match your needs.
• To evaluate providers of virtual data rooms, consider the safety and usefulness of their respective platforms.
• Make sure that the data room is organised as if it were a real physical place, considering the importance of data security measures and accessibility controls. 
• Check that the right permissions and access levels are set in the security settings..
• Transmit the documents, including watermarks where they are required.
• Invite all users of your data room software.
• Maintain control by modifying easy access settings and rescinding the papers.
• Make the best use of the reporting tool to monitor overall development and the level of user interaction. 
• Combine physical non-disclosure agreements with virtual access agreements.

Extra recommendations for setting up virtual data rooms

Unlike physical data rooms, virtual data rooms provide more flexibility to accommodate the particular requirements of your company. 

If you want to execute document exchange or share financial accounts for almost any investment opportunity, stick to these recommendations.

1. Remember: Your system requirements matter

Adjust the needs of your system to the data room requirements to ensure the highest level of control over the transaction process. 

Sufficient memory and processing capacities should be available to accommodate all the authorized parties who will concurrently enter the deal room.

Ensure a quick and dependable internet connection. If you encounter any lags or errors, they will eventually disrupt VDR collaboration and strategic partnerships with prospective investors.

2. Configure the data room 

“General settings” provide a vast array of choices to personalise the processes in the manner in which your project is indexed, encrypted, and preserved. 

When it comes to administering these jobs on an ongoing basis, activate or discontinue automated document indexing, adjust the kind or size of flash devices that are used for archiving projects, and add contacts who will have access controls to these tasks.

3. Consider the integrations available

Most data room vendors provide interfaces with a wide variety of popular applications and services, including communication tools, video conferencing applications, and collaborative software platforms.

Single sign-on features are yet another integration that should be mentioned. The availability of this option allows companies to instantly enlist their staff members. Data room managers then invite users to participate in the deal project. 

To enter the data room, users are sent an email with smart links to get access in a transparent manner without further registrations or authentications. 

Beyond being simple and secure, this feature provides an additional degree of safety.

4. Pay attention to reports tracking activity

There are plenty of reports available to help you track reports such as financial transactions and financial statements:

• Data storage usage
• Files and folders
• Folder access
• Groups overview
• Groups and users
• History of actions
• Q&A activity.

5. Customize your settings

The use of a virtual data room is an excellent way to manage and disseminate vast amounts of corporate information. 

To get the most out of your experience in the successful data room, you should personalise your settings and alter the following:

• Restrictions on file sizes. The process of uploading large files may be time-consuming and slow down your VDR functionality. Reduce the size of your files to prevent this cause.
• Size restrictions for companies. When you are dealing with a large company, opt for a data room size enough to store your key information without using all its space capacity.
• Configurations for secure access. After you have finished configuring the security settings, safeguard the data and prevent it from being accessed by unauthorised third parties.

By making these adjustments, you will be able to guarantee that your experience in the virtual data room is both seamless and productive. 

6. Use watermarking

Generate a one-of-a-kind identification for your work by creating a watermark. In case someone tries to utilise your work, watermarking is the most effective way of copyright protection. 

Watermarking will not only protect your work against potential infringement but will also safeguard your rights in case of a dispute.

The bottom line

Smart use of a well-organized data room will benefit your business transactions. You will maintain all the information confidential and safe by providing access to authorized VDR users only.

Still unsure how to create a data room? Explore all of the elements accessible in your virtual deal room and get to know all the aspects of its operation.

Our ‘setting up a virtual data room’ tips will help you spot major gaps.

Opt for a reliable VDR platform that is both clean and safe to ensure utmost security for your transactions.