Virtual data rooms, also known as VDRs, ease collaboration to reduce costs and accelerate due diligence and negotiation in strategic transactions. By granting stakeholders access to all documents involved in M&A due diligence and post-merger integration, these online data rooms allow companies to manage more deals simultaneously within a shorter time.
VDRs are typically used to conclude transactions in the financial sector. For instance an investment firm that is a venture capitalist must review all the corporate documentation and contracts of a startup before negotiating an investment deal. This procedure of conducting due diligence requires an efficient and secure storage and an application that allows sharing of these documents.
Mergers and acquisitions (M&A) are other examples of the need for secure document storage and shared document management. In the life sciences sector, companies regularly merge, partner, and raise funds which require lots of document exchange and the protection of intellectual property.
Using an online data room to raise funds eliminates the hassle of physically transferring hard copies. It also ensures that sensitive information is not exposed to potential hackers and other unwanted third parties. A VC can also keep track of the number of times a document has been viewed, and for how long. This allows him or her review the process to make better decisions regarding future investments. Digify www.dataroomco.com/what-are-the-benefits-of-data-rooms/ includes dynamic watermarks to files that show recipients’ email addresses as well as IP addresses, which prevents unauthorised use and increases traceability.