A Virtual Data Room Business is an secure repository for sharing important documents, with the ability to monitor and track who has access to information. VDRs are used extensively across various sectors and functions. They are especially useful during the process of negotiating a deal, which usually involves third parties having access to large quantities of sensitive information. These third parties could be authorized employees or solicitors who work on behalf of the seller or buyer. It is often difficult to communicate information via email or hard copies. A VDR online allows for easy coordination of due diligence.

Typically, VDRs are utilized by companies that are raising capital, seeking an IPO or going through a merger or acquisition (M&A). In the stage of fundraising, a company is required to share information with dozens of investors, organize roadshows and attend conferences, where they may be addressing as many as fifty investors in a week. A Virtual Data Room can help to manage the influx of information and third party access, while retaining control over who is allowed access to data and documents.

Investors usually request an VDR prior to the release of a termsheet, to ensure that they have easy online access to all information they need about the company. Once a deal is complete it can be beneficial to use a VDR to update investors on a quarterly or monthly basis with the major highlights, which include financial performance and other important information about the business. Some companies prefer to provide their investors access to a KPI dashboard that they can access in real-time.

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