Virtual data rooms (VDRs) allow businesses to share important documents with clients, investors and the company’s leadership via the internet in a secure environment. VDRs can eliminate physical paper and associated costs, such as storage and printing, while providing greater due diligence control and efficiency.
Acquisitions and mergers
In M&A transactions, there may be huge amounts of documents to handle, each requiring careful review. VDRs can make the due diligence process more efficient, allowing both parties to work in one location and cutting down on meeting costs. In addition, the best online data room providers offer advanced features such as document indexing and redaction (blacking out areas of files so that personally-identifiable information remains private).
Fundraising
Venture capitalists or BD partners will often ask you to respond to a series of written diligence questions. This can result in many different sets of documentation. By sharing these questions and answers in a VDR and with viewer permissions dependent on the member of the investor/partner team, you can avoid unnecessary disclosure and make the whole process much more smooth.
Strategic Partnerships
Similar to M&As, you will have to share a significant amount of information with third parties as part of strategic partnerships. This can be accomplished easily with the use of a VDR which allows you to organize your documents and make them easily accessible to those you want to have access to them. A quality VDR can also allow you to set your own terms of usage which all users must accept before they can access your information.