A Virtual Data Room Business is secure repository that allows sharing private documents that are important and the capability to monitor and track who is accessing the information. VDRs are used extensively across many sectors and functions. They are especially useful during the course of a deal, which usually involves third parties having access to large quantities of sensitive information. These third parties could be solicitors or employees who act on behalf of the seller or buyer. Usually, it is difficult to share this information in hard copy or by email and an online VDR makes it easy to coordinate of due diligence.
Frequently, VDRs are used by companies seeking capital, seeking an IPO or undergoing a merger or acquisition (M&A). During the fundraising stage a company will need to share information with dozens of investors, conduct roadshows, and attend conferences where they could be interacting with up to fifty investors within the course of a week. A Virtual Data Room can help to manage the influx of information and access by third parties, but still maintaining control over who is allowed access to documents and data.
Investors will often seek an VDR prior to the release of an offer on a term sheet, in order to ensure they have easy access to the company, alongside any publicly available material they can access online. Once a deal is concluded, it can be helpful to make use of a VDR to provide investors on a quarterly or monthly basis with the main highlights, which include financial performance and other important information about the business. Some companies provide their investors a dashboard of KPIs that they can access in real-time.
