Virtual data rooms are a fantastic option for businesses that want to share confidential documents with third parties. They allow the documentation to be accessed safely and easily, while ensuring that it isn’t made publicly accessible or copied. They are commonly used for corporate transactions, such as mergers and acquisitions, or for financing processes.
Making an IPO, for example, requires a lot of due diligence as well as the sharing of documents with the public at large and shareholders. This involves the careful management of documents for the company and is usually subject to additional regulations and rules at the local, state and federal levels. Virtual data rooms streamline this process for companies looking to go public and ensure that all information needed is secure and accessible to the most appropriate individuals at the right time.
Startups utilize VDRs to invest as well, which means that a lot of sensitive information must be shared. This information is usually financial in nature and comprises historical and forecasted income statements and cap tables (including equity in options pool) and the allocations of equity in the founder between several founders. In addition, it’s common to include a plan of action with goals for the future growth of the company.
The members of a company’s board are a significant part of the business operations and must have access to all critical documents. However, they are frequently located across the globe and require a convenient way to communicate with each other and share documents with key stakeholders. A good virtual space will provide features like drag-and-drop upload bulk invitations, dynamic watermarking, auto index numbering, and more to ensure that this process is easy and efficient for all parties.