If you’re a company owner who is seeking to raise funds, plan for an initial public offering (IPO) or simply restructuring using an advanced Virtual Data Room could be an excellent decision. These secure online places allow for the secure storage and sharing of documents. The due diligence process is also made simpler and more efficient.

Most people are familiar with files sharing software like Dropbox or Google Docs, but these are not able to provide the functionality needed for M&A activities. A VDR designed specifically for M&A purposes offers an environment that facilitates collaboration, allows for the organization of files into categories, and includes tools for watermarking to stop unauthorized reproduction.

The ability to review and exchange documents from the convenience of an office or home is the primary reason many businesses choose to use the VDR. This removes the requirement for physical meetings and allows teams to collaborate in a more efficient way.

VDRs are especially useful for tech companies that operate across geographical boundaries. In the past, tech business leaders had to fly from Silicon Valley to New York City repeatedly to meet with potential investors and buyers. All of this can be done in one dataroom.

There are two types – buy-side and sell-side that serve different functions when it comes to the acquisition or sale of a business. VDRs are commonly used in mergers and purchases when buyers have to examine corporate documents in reams as part of the like this due diligence process.