Virtual Data Rooms are online storage facilities that are used to save and distribute documents. It’s commonly used during due diligence in M&A transactions, loan syndication and private equity and venture capital deals. VDRs are an effective, secure method to communicate sensitive information to third parties.
When choosing a VDR provider, look for one that has multiple pricing options. Some charge a monthly flat cost, while others offer different models such as per storage per page, per user. Some plans provide unlimited access to data and uploading users to access as much data as they’d like.
Find a service provider with robust security features that include antivirus and malware scanning and multifactor authentication as well as advanced encryption. Additionally, you should be able to set permissions down to the level of the file folder. This allows you to restrict access to team members as well as business units, projects or.
Finally, consider the ease of the use. A great VDR should have a simple configuration that is accessible to the C-suite as well as an accountants who are just starting out. Look for customizable UI colors and at-a-glance reporting that can be tailored to highlight important data points.
During the M&A phase, investment bankers and advisors share piles of documentation with regulators and investors. With the right VDR system, they can manage document management and streamline tasks while automating processes from one central location. This increases communication between teams and reduces risk. Due diligence is also more efficient and transparent.