Due diligence is required when a business prepares to raise funds or enter into a merger, acquisition or other kind of transaction. It requires a thorough review of a large number of sensitive documents. This includes financial records as well as legal agreements, contracts, and intellectual property documents. The ability to efficiently share and manage all of these documents with the appropriate parties can significantly speed up the process of selling and ensure confidentiality.

A virtual data room (VDR) is a secure and encrypted online repository that enables multiple parties to access, review and share confidential documents at any time. VDRs remove the need for physical storage of sensitive documents which is expensive and time consuming. Unlike traditional file sharing tools dedicated data rooms have many features like the ability to set permissions, auditing capabilities and watermarks http://www.dataroomnow.net/transaction-tracking-feature-was-announced-from-top-vdr-providers/ to stop document modification as well as leakage of information.

Virtual Data Rooms can make it easier for the preparation to raise funds or close an arrangement. Investors can make informed decisions based on having access to a well-organized and complete set of documents. A VDR will reduce the amount of time needed to complete due diligence.

Founders looking to raise funds can upload financial records, IP ownership documentation, and budget projections to their VDR. They can be reviewed by potential investors in conjunction with a pitch deck as well as a company overview. This will cut down on the time needed to conduct due diligence and increase investors’ confidence.