Virtual data rooms (VDRs) are typically used in M&A processes to manage the complex due-diligence process by giving participants to access business critical documentation in a secure environment. Being able to access all the data all in one place means the participants can concentrate on what is important, and less time is spent gathering and transferring information back and forth.

A VDR makes it simple to share documents that can be printed as well as downloaded and annotated. Most often, annotations are not accessible to others and are only accessible by the person who made them – which is a great feature to have when working with confidential documents.

In addition, VDRs can also help in reducing the time spent on acquiring documents. VDR can also help to streamline the lengthy M&A process by allowing potential buyers to access documents collaboration online and remotely, rather than having to travel from abroad and be present for an entire due diligence meeting. This makes the whole process more efficient.

Virtual data rooms can lower the cost of operating a physical room. Paying for a physical room as well as security and catering can be expensive, especially in the case of huge M&A deals that require top buyers to attend.

Finally, a VDR is a good place to store the files required for a fundraising or equity event, like pitch decks or financial projections. It’s much better than using free file-sharing software that doesn’t have the same level security including auditing capabilities, watermarking and auditing features.