Introduction

If you are selling your business or raising funds, one key aspect will be due diligence i.e., a buyer or finance provider looking under the bonnet to see what they are getting for their money. Historically, hard copies of documents would be stored at a location and reviewed manually. That all changes with advent of technology which allowed documents to be stored and reviewed online

Exit Readiness

  • Why choose a Virtual Data Room (VDR)?

    Due diligence is quicker and more efficient with a VDR: all your documents can be placed online in a searchable, secure environment. All parties to the transaction can simultaneously and easily view all relevant documents.

  • Finding a provider

    There are plenty of options out there. Do your research and speak to your professional advisors to find the right Virtual Data Room for you. There are different pricing models available so it’s important to understand your requirements to make sure you get the right fit for your deal.

  • Security and access

    The Virtual Data Room will store highly sensitive commercial information which needs protecting. Make sure your provider has top quality security in place including multi-factor authentication via mobile phones for extra protection. It’s a good idea to work with a provider which leverages security platforms from tech giants such as Microsoft (on their Azure platform) as this means you are taking advantage of billions of dollars of investment in data security at relatively low cost to you.

  • Access

    Controlling access is key. Your provider should be able to provide tailored access to the VDR: full, limited or even no access as the circumstances require. You should expect to protect documents by view / print / download. Some of the more sophisticated products are even able to protect Excel documents within a secure Microsoft 365 Viewer.

  • Searchability

    One big difference between an old school data room with hard copy documents and a Virtual Data Room is searchability. Choose a provider that can give you powerful tools to search and correlate documents.

  • Q&A

    A key advantage of using a VDR is that it should facilitate the Q&A process between buyers and the seller. It is important that you speak with your provider so that you understand exactly how the software you choose will fit into the process you are running.

  • Reporting and Analysis

    A good Virtual Data Room will have reporting and analysis tools which will allow you to understand exactly the points on which your buyer or buyers are focussing. If you are running a process with multiple buyers, you can gain valuable insights into which buyer is showing the keenest intent. The more sophisticated tools on the market will surface reporting data in the way you might expect from powerful business reporting software. Reports should also be downloadable to Excel.

  • Support

    Some providers provide a ‘software only’ approach, meaning that you will have to manage all aspects of the VDR process from your desk. This might be fine for very simple processes, but as M&A and fundraising processes can be very time-consuming and complex, it might be better to work with a provider which offers higher levels of service which means they can manage some of the heavy lifting for you.

  • Deal closing

    At the end of any process, it will be necessary to provide the parties to the deal with an archive. You should check with your provider that they are able to do this in a secure manner and that they are able to provide a comfort letter which warrants that the contents of the archive accurately reflect the contents of the Virtual Data Room at the point of closure and as disclosed to the purchaser.

  • Recent developments – machine learning and AI

    The more sophisticated providers are now either providing their own Artificial Intelligence (AI) tools or offering integrations to established legal-tech AI providers. Functionalities to look out for include automated categorisation of documents, automated redaction of sensitive terms and AI-driven red-flag analysis of documents. Of course, you may have to pay more for these ‘value add’ technologies. Expect much more from this kind of technology over the next few years.

Rich Hinchcliffe Author image

Written by Rich Hinchliffe
Principal at My Inhouse Lawyer

One of our values (Growth) is, in many ways, all about cultivating a growth mindset. We are passionate about learning, improving and evolving. We learn from each other, use the best know-how tools in the market and constantly look for ways to simplify. Lawskool is our way of sharing with you. It isn’t intended to be legal advice, rather to enlighten you to make smart business decisions day to day with the benefit of some of our insight. We hope you enjoy the experience. There are some really good ideas and tips coming from some of the best inhouse lawyers. Easy to read and practical. If there’s something you’d like us to write about or some feedback you wish to share, feel free to drop us a note. Equally, if it’s legal advice you’re after, then just give us a call on 0207 939 3959.

Like what you see? Book a discovery call

How it works

1

You

It starts with a conversation about you.  What you want and the experience you’re looking for

2

Us

We design something that works for you whether it’s monthly, flex, solo, multi-team or includes legal tech

3

Together

We use Workplans to map out the work to be done and when.  We are responsive and transparent

Like to know more? Book a discovery call

Freedom to choose & change

MONTHLY

A responsive inhouse experience delivered via a rolling monthly engagement that can be scaled up or down by you. Monthly Workplans capture scope, timings and budget for transparency and control

FLEX

A more reactive yet still responsive inhouse experience for legal and compliance needs as they arise.  Our Workplans capture scope, timings and budget putting you in control

PROJECT

For those one-off projects such as M&A or compliance yet delivered the My Inhouse Lawyer way. We agree scope, timings and budget before each piece of work begins

Ready to get started? Book a discovery call

How we can help

Help Boxes Desktop
Help Boxes Mobile

Like what you see? Book a discovery call

Recent Posts

12 April 2021

Crib sheet on data breaches – what to do

12 April 2021

Employment law update April 2021

12 April 2021

Design liability under construction contracts – a crib sheet

14 January 2021

GDPR Crib sheet, some golden rules

13 January 2021

Crib sheet on GDPR post Brexit, 10 step procrastinators guide

13 January 2021

What you need to know about Confidentiality

13 January 2021

Top 3 legal tips for start-ups

12 January 2021

Risk & Compliance Alert:
Read if you transfer personal data to the US

12 January 2021

M&A deals for SMEs: why so difficult ?

12 January 2021

Anti-Money Laundering 101