While VDRs are usually associated with M&A due diligence, they can also be utilized for every data sharing procedure which requires a company to share confidential information outside its firewall. VDRs are a great tool to facilitate sharing documents for any purpose, whether it’s an IPO or to raise funds from limited partners. They accomplish this by automating tasks and improving communication.
Contrary to their predecessors which required companies to mail physical documents to reviewers virtual data rooms allow users to view and access documentation on-demand. This does not just speed up the review process, but also ensures that confidential business documents are only viewed by authorized parties. It also eliminates the possibility of a security breach or compliancy violations.
For example, a VDR can provide detailed user activity tracking for all of the documents in the room. This includes who accessed which document and at what time. This feature can be useful when conducting security audits since it is able to prove that only a specific set of people have seen sensitive business documentation. It can also be useful in M&A due diligence because it provides a clearer picture of the level of interest and helps companies gauge what documents are most attractive to investors and bidders.
When selecting the right VDR make sure you choose one that allows for custom reporting and real-time analytics that give administrators the behind the background information they require. It should be easy to use on any device and provide an intuitive experience for a variety of users.