Choosing a Virtual Data Room for Due Diligence

When companies collaborate with partners to create structures, produce products or offer services contracts, data and documentation are usually shared. Virtual data rooms enable companies to share information securely, without exposing themselves to possible breaches or violating compliance standards. They also make the data accessible to review, locate and redact for all parties.

M&A due diligence is among the most frequently used applications for VDRs, but there are other situations as well. Private equity companies and funds use them to share portfolio data as well as tax information and fund documents with investors. Investment banks can make use of them to help 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 a VDR is crucial to the success of the deal. If you’re sharing a VDR my link another partner for M&A or a capital raise, ensure that the vendor has a track of reliability and support. Ask your vendor for uptime and downtime data and compare them to other the different providers.

Be sure to consider the quality of the experience. Find vendors that provide simple tools such as drag-and-drop to upload large amounts of files and at-a glance reporting. Make sure that the customer service representatives from the vendor are familiar with the specifics of your business and have previous experience with processes like yours. This way, they’ll be able to offer quick reliable, efficient and comprehensive support throughout the process.

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