A Virtual Data Room Business is an secure repository for sharing important private documents, with the ability to monitor and track who has access to the information. VDRs are used extensively across many areas and functions. They are particularly useful in the process of making a deal, which usually involves third parties having access to large amounts of sensitive information. These third parties could be authorized employees or solicitors who work on behalf of the seller or buyer. It is generally difficult to share this information by hard copy or via email and also an online VDR facilitates the coordination of due diligence.

Typically, VDRs are utilized by companies seeking capital, aiming for an IPO or undergoing a merger or acquisition (M&A). During the fundraising phase, a business might require sharing of information and host roadshows with as many as fifty investors per week. A Virtual Data Room helps to control this influx of third access and information, while ensuring that only the right person has access to documents and data.

Investors typically require the creation of a VDR before offering the term sheet to ensure they have easy access to information about the company, alongside any other publicly accessible material they might find online. It is a good idea to use a VDR once the transaction has been concluded to provide investors with key details such as financial performance or qualitative information about the company. Other companies may offer their investors access to an online KPI dashboard that they can access in real-time.

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