7 Steps for a Secure and Easy Virtual Data Room Setup

The global virtual data room market is permanently growing from the estimated USD 2.5 b. in 2024 to forecasted USD 5.6 b. by 2029. Business owners associate the main use cases of data room software with safe storage of valuable files and data-sharing options, as well as convenient project management. Whether you are looking into mergers and acquisitions (M&A) opportunities, a virtual deal room is the ultimate solution for quick and secure document sharing.

What’s the financial implication? Most M&A data room providers stick to per-page pricing packages, but the price depends on the value, scope, and duration of the M&A transaction. The best choice is to compare virtual data room prices to find the perfect subscription and provider.

While these online tools promise numerous benefits, there are also drawbacks underway like complex use, limited customization, and reliance on internet access. Before starting a journey of the data room setting, determine strategic goals and examine the VDR providers’ features and functions.

Prepare your files and documents

Before starting to structure a virtual deal room, make sure that all necessary documents and files are in place. In most cases, you will be dealing with both physical and electronic items and they must be handled properly.

Below are a few best practices for working with both.

Leverage a data room index, a table of contents, that will help you sort out all the documents inside the VDR and arrange all the information available. Ease your VDR journey by arranging all documentation per

• the degree of non-disclosure
• the order in which it will be required

Early decision-making on the confidentiality and sequence will save you time and effort before you get to the data room setup.

Once everything is in place for the VDR configuration, proceed with setting up a data room in the following steps.

7 steps to set up a virtual data room

First off, refer to our VDR services guide if you still doubt how to opt for the best-fit provider. The critical question on the next stage is how to set up a data room. We described the whole process in this simple and easy-to-understand manual.

Step 1: Register your account

The first step to saving your intellectual property on a virtual data room is to register on a chosen virtual data room services provider. Though the registration process varies from one provider to another, the basic procedure is pretty simple and similar throughout most popular solutions. 

To register your account, just follow the below-mentioned steps.

1. Fill in your personal details. They mainly include your name, email, and company information.
2. Accept the terms and conditions. So, check the “I agree on terms and conditions” box.
3. Create a strong password and back it up with a security question or other 2FA method. Remember it as it will be used once you need to reset the password.
4. Enter your cell number in the right format (if required). Make sure you have added all the correct information.

Trusted VDR providers like Datasite are committed to your privacy and never share user information with the third parties. Datasite ensures user-friendly account registration suggesting relevant apps for business and personal use.

Step 2: Create user groups

How to create groups and add members

Creating a group is not difficult at all. There are two types of user permissions for most data rooms.

• Administrators. Administrators have full control of the virtual data rooms. They can invite users, manage permissions, and view activity reports.
• Restricted administrators. As the name suggests, the restricted administrators only have access to restricted controls.

Once you decide to provide someone with a limited access, the restricted mode will come in handy.

Restricted administrators can manage only selected user groups. They may be authorized to view or change permissions of the chosen participants and access their activity reports at any time.

What types of users exist?

• Collaboration users. Collaboration users can see all of their group’s permitted documents, and post notes to files or folders. They are also allowed limited access for collaboration with other user groups in the data room. However, if you want them to be able to communicate more than just through messaging on an application then we recommend providing them with a question-and-answer privileged status. This way, they will ask questions during Q&A sessions.
• Individual users. Data room security assumes limited access to Individual users. Individual access levels allow viewing permitted documents, creating private notes in files and folders, and seeing their personal activity reports once allowed by Q&A coordinators. These access levels are only granted at higher levels within the department or through an external agency.

As an example, Caplinked data room user group settings allow for creating groups and setting permissions so that users can enter the data room workspace to review 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. Now you have to create a group you want to invite new users to. For this click on the “New group” button.
3. You can now send individual or bulk invitations to a newly created or an existing group in your virtual data room.

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 settings of user profiles cannot be changed. This includes their email address and other personal details. However, you can change their data room access rights. For instance, Intralinks VDR allows adding multiple users simultaneously or import users from another data room by inserting their emails and assigning their proper roles

Step 4: Set access permissions

You’ve nearly finished the data room setup process. The next thing you need to do is to upload the documents into the layout you created. This process is purely technical.

What types of user permissions could be?

These are available sets of 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” function is a great way of spotting who’s allowed in on your confidentiality. Firmex provider enables file and folder and subfolder permissions for user groups and individual members.
• Exporting permissions. Permissions are easy to adjust and review with a few clicks. You can also export your permissions for an accurate report on who has what authority in the project.

Step 5: Remember about NDA

Before you share any files within a VDR, it’s important to understand the importance of signing a non-disclosure agreement (NDA) with a party granted access. This way, you’ll ensure high-level protection of confidential materials potentially accessed by third-party users and groups.

The NDA is a contract that protects both parties from sharing confidential information. By signing an NDA, you and your business partners are agreeing not to disclose any information that is shared in the VDR. This includes everything from trade secrets to customer data.

If you or one of your business partners breaches the terms of the NDA, you could face legal penalties. It’s therefore essential to take care when uploading files to a VDR and to only share information that you’re comfortable with being made public.

When choosing a VDR, make sure that the provider has a robust security infrastructure in place. This will safeguard your files from unauthorized access.

Step 6: Upload documents

While working in a virtual data room, you may need to add documents to the system. This can be done in a few different ways, depending on the document and the system.

In many cases, companies can simply upload the document to the virtual data room, or drag and drop it into the interface.

You can also add documents by copying and pasting the link into the virtual data room, or by using a proper add-on tool.

Whatever method you choose, make sure you are adding the right document to the right place in the system. Otherwise, it can be difficult to find it.

Which formats could be added to data rooms?

Following are the formats which are widely supported:

How to upload documents to the virtual data rooms?

1. Log into the virtual data room and select the “Upload” tab for uploading your desired document.
2. Click the “Choose File” button.
3. Navigate through folders to find the required document file. 
4. Select it, then click “Open”. That is it.

It does not matter how many files you upload. What matters is their structuring. Arrange them properly to ensure your best virtual data room experience.

Step 7: Double-check everything

When you are uploading documents to a virtual data room, check them for potential security risks. Here’s the summary of data room setup issues prevention to consider:

• Make sure the documents are virus-free.
• Remove any sensitive information before uploading, like social security numbers or bank account numbers. Alternatively, use the Redaction feature built into many data rooms to hide the sensitive information when sharing.
• Check that all files are in the correct format and size to ensure the right data room experience.
• Verify that the document titles are accurate and descriptive.
• If you are uploading multiple documents in data rooms, make sure they’re in the correct order.

By taking these precautions, you’ll safeguard your confidential information in a virtual data room.

Before you start actively using the virtual data room software

Just before you dive into your virtual deal room setup, here are three final tips on getting the most out of the process.

• Avoid using mainstream cloud storage solutions. While most cloud storage is secure enough to hold sensitive data, it might lack the tool versatility required for fast and effective file sharing. Focus on finding specialized data room software for the best result.
• Test everything before you implement. When you are ready to invite all the members required, use the View As instrument to ensure you granted access permissions properly. The same tool can also help you evaluate the effectiveness of the layout from another angle.
• Find the right balance between security and simplicity. While your instinct might be to apply extreme safety measures to each item in the room, it can significantly slow down the process and tire out other participants. Put yourself in the shoes of the people in charge of due diligence and make it simple for them to navigate the room, while still keeping sensitive data protected.

The virtual data room setup checklist

In just a few short steps, your virtual deal room is ready to go. Below is a brief summary of all the things to keep in mind.

• Assemble and organize all the documents and files in advance
• Find the virtual data room software that meets your requirements
• Evaluate virtual data room providers by the security and functionality of their platforms
• Organize the data room as if it was an actual physical space, keeping accessibility and data safety in mind
• Set appropriate access levels and permissions in security settings
• Upload the documents, adding watermarks wherever needed
• Invite all required data room software users
• Remain in control by adjusting the access settings and retracting the documents when necessary
• Combine physical NDAs with virtual access agreements upon data room entry
• Rely on the reporting feature to track user engagement and overall progress

Extra recommendations for setting up virtual data rooms

Compared to physical data rooms, virtual data rooms offer much more flexibility for your business specific needs. So, to stay on the safe side, here are more recommendations. 

These tips will help you perform document exchange or share financial statements for nearly any investment opportunity.

1. Remember: Your system requirements matter

To get the best control over your transactions, you need to ensure that your system requirements are in line with your chosen data rooms. Ensure enough memory and processing power to handle the number of users who will access the deal room simultaneously.

Also, be sure your internet connection is fast and reliable. If you experience any slowdown or glitches, it can be very disruptive to the team’s work.

2. Configure the data room 

The “General settings” section includes all sorts of options to customize how your project is indexed, encrypted, and maintained. You can figure out all such aspects of your company’s projects.

You can enable/disable automatic document indexing and change what type or size flash drives are used for archiving projects as well as adding contacts that will have access when managing these tasks on an ongoing basis.

3. Consider the integrations available

Most data room services offer integrations with a range of popular apps and services, varying from communication tools to video conferencing apps and collaboration software among other options.

Another integration worth mentioning is single sign-on. This option enables businesses to enroll their employees immediately. From there, data room administrators invite users to the project. To join the data room, users receive an email with smart links that allow for transparent access without any further registrations or authentications. This is both convenient and secure with an extra layer of protection.

4. Pay attention to reports tracking activity

There are plenty of reports available to help you track the reports such as financial records.

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

5. Customize your settings

A virtual data room is a great way to manage and share large volumes of company information. However, to get the most out of your virtual data room experience, it’s important to customize your settings. In particular, make sure you adjust the following:

• File size limits. Large files can take a long time to upload and may slow down your virtual data room functionality. To avoid this, limit the size of your files.
• Company size limits. Once you deal with a large company, opt for an appropriate data room size to store your information without running out of space.
• Security settings. Once you configure security settings, select the best-fit options for your company to protect the data and save it from unauthorized third-party access.

By adjusting these settings, you can ensure a smooth and productive virtual data room experience.

6. Use watermarking

By watermarking your work, you create a unique identifier. I Once someone attempts to use your work, watermarking is your best choice to protect copyright. While watermarking will not solely save your work from possible infringement, it will protect your rights in case of disputes.

The bottom line

A virtual data room is an incredibly useful tool for your business. It allows you to keep information safe and secure while making it easily accessible to authorized parties.

Take the time to explore all of the features available in your virtual deal room and clarify all the nuances of its functionality.

Our ‘setting up a virtual data room’ tips will help you figure out critical gaps you won’t fill yourself.

Take a clean and secure VDR platform as a key success factor for your business security.