Choosing a Virtual Data Room for Due Diligence

When businesses collaborate with their partners to create products, build structures, or offer services contracts, information, and documentation are usually shared. Virtual data rooms allow companies to safely share this information without exposing them to potential security breaches or committing violations to compliancy standards. They make it easy for everyone to access, review, and redact the data.

VDRs are used in numerous situations and include M&A due-diligence. Private equity firms and funds provide information about their portfolios as well as tax information and fund documents to investors. Investment banks can utilize these to assist the buy-side and sell-side of financial transactions by helping by preparing documents, due diligence and contract review.

During due diligence, the integrity of the VDR is essential to the success of the transaction. Whether you are sharing a VDR in M&A, a capital raise or other deal, you should choose an organization that has demonstrated reliability in performance and support. Ask your vendor for uptime and downtime statistics and compare these with other different providers.

Think about the quality of your experience. Find vendors that provide simple tools such as drag-and-drop for uploading large files and at-a-glance reports. Lastly, make sure the vendor’s client services representatives understand the nuances of your company and have previous experience with processes similar to yours. This will allow them to provide quick and efficient assistance throughout the process.