The Benefits of a Virtual Data Room Business

A Virtual Data Room Business (VDR) is an encrypted repository for sharing important private documents, with the capability to track and record information access. VDRs are used in a wide range of business and industry functions. They are particularly beneficial during the course of a deal, which often involves third parties having access to large amounts of confidential information. These third parties could be authorized employees or solicitors who work on behalf of the buyer or seller. It can be difficult to share information via email or hard copy. A VDR online makes it easy to coordination of due diligence.

Frequently, VDRs are used by companies seeking capital, aiming for an IPO or going through an acquisition or merger (M&A). During the phase of fundraising, a company may need to share information with more than fifty investors every week. A Virtual Data Room can help deal with the influx of data and access by third parties, while retaining control of who is allowed access to data and documents.

Investors usually require a VDR prior to the release of a termsheet, to ensure that they have easy access to all the details they require about the company. It is beneficial to use a VDR after the transaction has been concluded to provide investors with key aspects such as financial performance and qualitative information about the company. Some companies prefer to provide their investors access to a KPI dashboard that they can access in real-time.

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