Typically used during the M&A process Virtual data rooms (VDR) manage the complex due diligence process by allowing parties access to important documents for business in a secure environment. All information is kept all in one place, ensuring participants can focus on the important things and reduce time.
A VDR makes it simple to share documents that can be printed, downloaded and annotated. The annotations are usually only able to be seen by the person who created them. This is particularly useful when working with highly-confidential documents.
A VDR can also streamline the long M&A processes by giving prospective buyers access to documents online and remotely. This is more efficient than flying from abroad to attend an extensive due diligence. This makes the entire process more efficient.
Utilizing a virtual data room can also help reduce the costs of operating a physical room. Costs for a physical room as well as security and catering can be costly, particularly when you’re dealing with large M&A deals that require high-level buyers to attend.
A VDR is also a great place to save documents that you need to use in a fundraising or equity event, like financial projections or pitch decks. It’s a lot better than free file-sharing software that doesn’t have the same level security including auditing capabilities, watermarking and auditing features.