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The Benefits of a Virtual Data Room Business

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A Virtual Data Room Business (VDR) is a secure repository to share important documents that are private, and has the capability to track and record information access. VDRs are commonly used across various areas and functions. They are particularly useful during the process of making a deal, which often involves third parties accessing large quantities of sensitive information. These third parties could be solicitors or employees with a valid license who work on behalf of the seller or buyer. It is generally difficult to share this information in 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 to raise capital, undergoing an IPO, or undergoing a merger and acquisition (M&A). During the fundraising phase, a company may need to share information and host roadshows for up to fifty investors per week. A Virtual Data Room helps to manage this influx of 3rd access and information, while ensuring that only the right person has access to data and documents.

Investors will often ask for a VDR prior to releasing an offer on a term sheet, in order to ensure they have quick access to information on the company, alongside any other publicly accessible material they can access online. After a deal has been concluded, it can be helpful to utilize a VDR to inform investors on a monthly or quarterly basis with the key highlights, including the financial performance of the company and other information about the business. Some companies provide their investors an overview of their KPIs that they can access in real-time.

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