Virtual data rooms are used for a variety of reasons in a range of industries. Whether you’re preparing for fundraising, considering taking your company public, or looking to take control of corporate documents scattered across multiple desks, hard drives, and shared folders, there are many reasons to use a virtual data room. Here are a few of the most common VDR use cases.
During the fund application process, you’ll need to demonstrate a history of positive performance to potential investors. A VDR provides a place to securely store all financial and reporting information and grants limited access to investors for auditing and reporting purposes.
M&A Due Diligence
One of the most popular reasons to get a VDR involves the M&A process. A virtual data room eliminates the need for a physical deal room but still serves as a place to securely review business details and ask questions as needed.
VDRs provide the ability for multiple parties to complete due diligence at the same time. During mergers and fundraising, any approved decision-maker can view sensitive documentation within a controlled and secure environment. For companies merely entertaining a purchase offer, it can be daunting to hand over the sensitive data that will be requested. Thus, companies heavily engaged in M&A can still participate in negotiations and allow for the safe viewing of valuable, confidential data by relying on a purpose-built VDR. And in the event that a deal does not close, access to the data room can simply be terminated.
Controlling your copyrights, patents, trademarks, and other elements included in a licensing deal is an essential part of protecting your business. Virtual data rooms offer a secure location to house this information and easily share with your partners.
Many businesses have employees scattered across multiple offices, so a virtual data room can serve as the private and secure cloud where employees access data and documents no matter where they are geographically located, so long as they have been granted access by an administrator.