Setting up a data room takes one to three days if the documents exist, and most of that time goes into the index, not the software. This guide gives the order that works for a company sale, a fundraise or a financing: decide scope and audience, build a numbered index, prepare and name files, set access per party, add protection, stage what each party sees, and run the room until closing. A checklist at the end lets you check readiness before the first invitation goes out.
The 10 steps
- Define the audience and the stages. Who will enter (bidders, investors, lenders, auditors), how many parties, and what each stage reveals – teaser, then information memorandum, then full diligence for the shortlist.
- Pick a pricing model that fits the timeline. A 4-week raise and a 9-month sale need different billing; per-user prices grow with your deal team. Compare models in the pricing report or run the cost calculator.
- Build a numbered index first. Start from the request list the other side will send. Our checklists give ready, numbered indexes with CSV download: M&A, real estate, all deal types.
- Collect and clean the documents. Final signed versions, PDFs rather than editable files, scans readable and rotated, no draft comments or tracked changes.
- Name files to match the index – "3.2 Customer contract – Acme 2025.pdf", not "scan_0042.pdf". Buyers' advisers will quote the numbers in their questions.
- Create one group or link per party. You will see each party's activity separately and can close one without affecting the others.
- Set protection per folder. View-only by default; downloads only where advisers need offline copies; a watermark with each viewer's e-mail on sensitive folders; expiry dates; an NDA before the first document opens.
- Stage the release. Keep the most sensitive folders (customer contracts, payroll, IP) locked until the shortlist; open them per party, not for everyone.
- Test as a guest. Open the room from an outside e-mail on a phone: check the NDA, the watermark, that blocked folders stay hidden and that files open quickly.
- Invite, then run the room. Turn on view alerts, answer questions in one log, add documents as they are requested, and review activity weekly – parties who read the financials and key contracts are the ones moving forward.
A starter index (company sale)
| # | Folder | Examples |
|---|---|---|
| 1 | Corporate | Articles, shareholder register, board minutes, group chart |
| 2 | Financial | Audited accounts (3 years), management accounts, budget, debt |
| 3 | Commercial | Top customer and supplier contracts, pipeline, pricing |
| 4 | Tax | Returns, audits, transfer pricing |
| 5 | Legal | Litigation, licences, regulatory |
| 6 | HR | Org chart, key employment contracts, incentive plans (anonymised) |
| 7 | IP & technology | Registrations, assignments, open-source use, security |
| 8 | Real estate & assets | Leases, title, insurance |
| 9 | Transaction | Teaser, IM, process letter, NDA, Q&A log |
Permissions that work
| Role | Sees | Download |
|---|---|---|
| All bidders, round 1 | 9 Transaction, summary financials | No |
| Shortlisted bidder | All folders except locked sub-folders | No, except selected reports |
| Bidder's lawyers / accountants | Their area (legal or financial/tax) | Per folder |
| Your advisers | Everything, can upload | Yes |
Mistakes that slow deals down
- Opening the room before the index is complete – buyers' first impression is "disorganised".
- One shared link for everyone – no activity per party, no way to revoke one bidder.
- Uploading editable spreadsheets with hidden tabs or comments.
- Answering questions by e-mail instead of in one Q&A log.
- Leaving access open after signing or after a bidder drops out.
The full list of rules for every phase, from the index to freezing the room at closing: data room best practices.
Readiness checklist
- Index numbered and every file named to match it
- NDA text ready and switched on
- One group or link per party, protection set per folder
- Tested as a guest on a phone
- Alerts on; someone owns the Q&A log
- Expiry or closing plan (export activity and Q&A at the end)
FAQ
How long does it take to set up a data room?
One to three days when the documents exist; a few weeks if they must be collected, signed copies found and scans cleaned.
What should be in a data room?
Corporate, financial, commercial, tax, legal, HR, IP and asset documents plus the transaction documents, organised in a numbered index that follows the buyer's request list.
Can I set up a data room in Google Drive or Dropbox?
For a small trusted circle, yes. For several outside parties you lose per-party activity, per-viewer watermarks and NDA gating – see our Dropbox as a data room guide.
Who should have access to a data room?
Only named people from each party, through their own group or link, with view-only access by default and downloads enabled per folder where advisers need them.
Related: how to use a data room for due diligence · deal room software · cheap data rooms.