When a company is planning to conclude an M&A or IPO the company must exchange a number of documents with potential buyers. These documents must be kept private and safe, and made available to those who are bidding on the deal. A virtual dataroom allows buyers to look at these documents without the burden of navigating huge volumes of paperwork, or travelling to a business. A good VDR will also block competitors from accessing these confidential materials.
Generally, the data room is usually filled with financial due diligence documents that have been audited. These include balance sheets as well as income statements and other reports. Additionally there will be intellectual property due diligence files that provide details of the company’s intangible assets, including trademarks and branding. Due diligence might also include a section on tax due diligence, which is essential to determine and comprehend possible tax liabilities for the business.
Some companies upload whitepapers and pitch decks into their data rooms. These files provide a concise overview to potential investors of the issue the company is tackling. They will also show how the company is uniquely positioned to tackle the issue and what it plans to do to address it. Founders can use their data rooms to share information regarding the current fundraising process. These files include completed legal documents including term sheets, capitalization virtual data rooms vs free cloud storage tables and tables. A good data room will have a suite reporting tools which give administrators a quick review of user activity. This includes the type of documents were viewed, and when.