Due Diligence Data Room Checklist


Digital data rooms are used in teamwork to enable secure collaboration on shared documents. Thus, it is a necessary tool for the due diligence procedure. But how do we choose the best vendor?

What is the due diligence Data Room?

Due diligence in the context of company acquisitions can be seen as the most common reason for investigations. The main purpose of due diligence is to eliminate information asymmetries between the parties to the transaction and to create a balance of interests. Critical points that have to be taken into account later in the determination of the purchase price or the formulation of the purchase contract are identified here.

Financial due diligence in the context of company mergers is an indispensable tool for decision support, purchase price negotiations, and the formulation of the purchase contract.

Those who structure the due diligence, protect themselves against risks, simplify integration, and in short, create transaction security. An important tool that helps to make business operations more secure is Virtual Data Room. It is an online repository in which data is stored on innumerable servers distributed on the network, provided for use by customers, mostly by a third party.

The virtual storage of data enables anytime access from any imaginable location. Regardless of time and place, employees and business partners can specifically access individual documents after assigning passwords.

Data Room for due diligence checklist

A digital data room can be used in a variety of ways. On the one hand, this is used to store and archive data. On the other hand, a digital Data Room can also be integrated into documentation systems and control systems. Concerning the possible applications, there are no limits to the imagination. A digital data room is particularly efficient wherever complex processes have to be monitored.

There are now a large number of providers, so the decision on a solution is not always easy. With the following due diligence Data Room checklist, we offer you help in choosing the right software provider and in processing your transaction securely and efficiently:

  • Security

The protection of the confidentiality of all data during due diligence is an absolute must and should come first in the checklist. Data is the most valuable corporate asset for any business. Databases need to be protected and the relevance of this protection is regularly checked. By using special programs and techniques, you can prevent unauthorized access or leakage of information not intended for publicity.

  • Reliability

 In the IT environment, there are a large number of young start-up companies where it is uncertain whether the continued existence of the company will be secured even after several years and the reliability of the operation is unclear. A failure of a Data Room during due diligence can have fatal consequences.

  • Ease of use

The decisive criterion for the efficiency of a Data Room is first and foremost ease of use. Both on the seller side when filling the platform and on the user side with bidders. Users cannot and do not want to spend unnecessary time learning how to operate the Data Room. The easier and more intuitive the room is to use for everyone involved, the faster and more efficient your due diligence will be. Some companies offer you the opportunity to set up software free of charge for test purposes to get an impression.

  • Functionality

Only when the first three points mentioned above can be assessed positively you should check the functionality of the service. Functionality can very quickly increase the complexity of a Data Room application and thus harm user-friendliness.