If a company wants to do an IPO or complete a M&A deal, it will need to exchange huge volumes of documents to potential buyers. These documents are classified in nature and must be securely stored and accessible to those bidding for the deal. A virtual data room allows buyers to access these files without the need to manage the large amount of paperwork or travel to the company’s offices. A well-designed VDR can also prevent competitors from accessing these sensitive documents.
Typically, the data room will typically contain financial due diligence documents that are audited. They include balance sheets and income statements, as well as other reports. Additionally there will be intellectual property due diligence documents which provide information on the company’s tangible assets, such as trademarks and branding. This kind of due diligence may also include a section on tax due diligence, which is necessary to determine and comprehend the tax liabilities that could be www.vdrdeluxe.com/virtual-data-rooms-vs-free-cloud-storage/ incurred by the company.
Some companies put whitepapers or pitch decks into their data rooms. These documents will provide a potential investor with a brief overview of the problem the company is solving, the way they can best solve that issue, and what they are planning to take action to solve it. Founders can also utilize their data rooms to provide information on the current fundraising process and include legally drafted documents terms sheets, capitalization tables. A quality data room is equipped with a set of reporting tools that provides administrators with a comprehensive overview of the user’s activity, including what documents were viewed and when they were viewed.