Virtual data rooms are a fantastic tool for companies that need to share confidential documents with third parties. They allow the documentation to be accessed in a secure and easily, while also ensuring that it isn’t made publicly accessible or copied. This is why they are often utilized during corporate transactions such as mergers and acquisitions or for funding processes.
For instance, executing an IPO requires the use of a lot of due-diligence and document sharing with both shareholders and the public. This involves careful management of documents for the company and is typically subject to additional rules and regulations at view it now the state, local and federal levels. Virtual data rooms simplify the process for companies planning to go public and ensure that all necessary information is available to the proper people at the appropriate time.
Startups also employ VDRs to secure funding which requires a large deal of sensitive documentation to be shared. This type of information is typically of a financial nature and can include historical and forecasted income statements caps tables (including equity in options pool) and the relative allocations of founder equity among several founders. In addition, it is common to include a plan of action that includes strategic goals for the future development of the company.
Board members of a business are involved in business operations and require access to all documents. They’re often scattered across the globe and need a convenient platform for sharing and communicating documents with their those in the company. A well-designed virtual dataroom should include features such as drag-and-drop, bulk invitations and watermarking.