A Virtual Data Room Business (VDR) is an encrypted repository for sharing important documents with the ability to track and record data access. VDRs are commonly used across various areas and functions. They are especially useful during the course of a transaction, which involves third parties accessing large quantities of sensitive information. These third parties could be solicitors or employees who are authorized to work working on behalf of the seller or buyer. Usually, it is difficult to share this information on hard copy or by email and also an online VDR makes it easy to coordinate of due diligence.
VDRs are typically employed by companies looking for capital, undergoing an IPO or merger and acquisition (M&A). During the fundraising phase, a company may need to share information with a number of investors, host roadshows and attend conferences, where they could be interacting with fifty vdrdesign.com or more investors in a week. A Virtual Data Room can help manage the influx of information and third party access while retaining control of who has access to data and documents.
Investors usually ask for the use of a VDR prior to the release of terms sheets, to ensure they have easy access to information on the company, in addition to any other material that they can find online. After a deal has been concluded, it is beneficial to utilize a VDR to inform investors on a quarterly or monthly basis with the major highlights, which include financial performance and other important information about the business. Some companies prefer to provide their investors access to a KPI dashboard that they can view in real-time.