Data rooms and online due diligence

Due diligence has traditionally been carried out by the vendor collating the relevant documents and placing them in a room, to be inspected by the purchaser and its advisors.

In recent times, these physical data rooms have largely been replaced by online data rooms. The documents are scanned and loaded onto a website, with the purchaser and its advisors having access by use of a password.

There is a tendency to load too much data into the data room. Supplying too much data can be as uninformative as not supplying enough.

See Due diligence after exchange/signing.