A virtual dataroom (VDR) allows you to share documents online as part of a due diligence procedure. They are commonly used in M&A transactions, but they are also useful for fundraising rounds or other business transactions. They provide many advantages like a simplified due diligence process secure document storage and sharing, advanced security features, and easier collaboration.
VDR vendors frequently promote the savings in time and cost they offer. They can cut down on paper consumption, photocopying, and indexing and rental fees for physical meeting spaces, courier services, and office supplies. They permit participants to access the system at a single time from anywhere in the world. This can accelerate due diligence and increase the likelihood that a deal will be completed quicker.
Another benefit of a VDR is that the information can be stored and accessed securely for as long as needed without worrying about losing materials or having them affected by fire or weather. This is in contrast to storing documents on a computer or server which are susceptible to theft or other types of damage.
If a tech company is looking for investors, it is able to upload confidential revenue forecasts and intellectual property documents to the dataroom for potential investors. This can help speed up the due diligence process and improve confidence in investors about the company’s growth prospects. This can lead to more bidders, which could push the price of selling the company being sold. A VDR is also an excellent method to display customer references and referrals which can increase trust among investors.