Whether you’re a business owner who wants to raise funds, plan for an initial public offering (IPO), or simply restructuring your business, using an advanced Virtual Data Room could be an excellent choice. These secure online spaces allow secure storage and sharing of documents. The process of due diligence is also made simpler and more efficient.
Most people are familiar with file sharing applications like Dropbox or Google Docs however, these don’t offer the features required for M&A activities. A VDR designed specifically for M&A purposes provides an environment that facilitates collaboration and allows the organization of files into categories and also includes watermarking tools to prevent unauthorized reproduction.
Many companies use VDRs because they are able to review and exchange documents whenever they want at home or in the office. This eliminates the need to hold meetings and allows teams to work more efficiently.
VDRs are especially beneficial for tech companies that operate in a variety of locations. In the past, tech company executives had to travel from Silicon Valley to New York City often to meet potential buyers and investors. Today, all of that is done in the same virtual data room.
There are two types of VDRs that are buy-side and sell-side that serve various purposes during the acquisition or sale of a business. VDRs are most commonly used for mergers and purchases as buyers have to examine reams corporate documentation as part of the due diligence process.