Virtual Data Rooms are a great option for business owners looking to raise money, prepare for a public offering, or change the structure of their business. These secure online sites provide safe storage and sharing documents. They also make due diligence much easier and more efficient for all participants.
The majority of people are familiar with files sharing software like Dropbox or Google Docs however, they are not able to provide the functionality required for M&A activities. A VDR specifically designed specifically for M&A purposes provides a platform that enhances collaboration and allows the organization of files into categories and can include watermarking tools to ensure that no copying is allowed.
Many companies opt for VDRs since they can access and exchange documents at their convenience at their home or office. This reduces the need for meetings and allows teams to work more efficiently.
VDRs are particularly useful for companies that work across geographical boundaries. In the past leaders of technology companies needed to fly back and forth from Silicon Valley to New York City to meet with buyers and investors. All of this is now possible in a single virtual dataroom.
There are two kinds – sell-side and buy-side – that have different purposes during the acquisition or sales of a company. VDRs are commonly used to facilitate mergers and purchases in situations where buyers must review reams of corporate documents as part the due diligence process.