VDRs are, although typically associated with M&A diligence however, they can be used in virtually any data-sharing process that requires the company to share confidential data outside its firewall. VDRs can simplify sharing documents for any purpose, whether it’s an IPO or to raise funds from limited partners. They do this by automating tasks and enhancing communication.
Virtual data rooms allow users to access and view documents on demand, unlike their predecessors that required companies to deliver physical copies of documents to reviewers. While this makes reviewing much quicker and more efficient, it also ensures that only authorized parties can see confidential documents for business, and reduces the possibility of an incident of security or compliancy violation.
For instance, the VDR can provide granular user activity tracking for each of the documents in the room including who accessed which document and when. This feature can be useful when conducting security audits because it is able to prove that only a select group of people has seen sensitive business documents. It can be useful in M&A due diligence because it gives more information about the levels of interest and helps companies identify which documents are most appealing to investors or bidders.
When selecting when choosing a VDR, look for one that allows for custom reports and real-time analytics to provide administrators with the behind the information they require behind the scenes. It should also provide a seamless document upload experience for multiple users, and be easy to navigate on any device, but especially mobile devices.