Virtual data rooms are a cost-effective and secure alternative to traditional document sharing. They can be utilized for a variety of business transactions, such as mergers and acquisitions and fundraising, strategic partnerships and intellectual property management audits, corporate development, board communications and more.
Mergers and Acquisitions
The most common use case for virtual data rooms is mergers and acquisitions where a company may need to furnish or review a huge amount of documents in due diligence. These large amounts could make the process expensive and time-consuming process as a result, and VDRs enable buyers to access the information they need without needing to travel to the location of the seller.
IPOs
Companies that choose to go public must maintain a high level of transparency with both the public and shareholders, so they need a secure system for document sharing. They can make use of virtual data rooms to store and share information with investors, shareholders, lenders, and others while ensuring their confidential information is kept out of the hands of rivals.
Litigation
Secure virtual data rooms are utilized by law firms and their clients to safeguard sensitive data from competition or legal action. They can set the files as only accessible to specific users, thus preventing them from sharing information that could be damaging to the case.
Exit and Estate Planning
Often, attorneys have to share sensitive information with third parties during estate and exit planning as well as real estate transactions. They can make use of a secure virtual data room to manage the process and keep all the documents in one place. This makes it easier for them to share information amongst their colleagues.