VDR due diligence is a method that involves multiple parties who review documents that are classified as part of an agreement. It’s a key element in M&A deals, but it can also be used for fundraising as well as bankruptcies, litigation and other business transactions that involve sensitive information such as research results, patent-pending technology and much more.
Virtual Data Rooms (VDRs) are secure online repositories which allow sharing of large volumes of confidential files that are beyond the boundaries of a company’s firewall. They differ from cloud storage solutions like Dropbox and Google Drive, as they have advanced security measures that protect confidential and privileged documents. These include document encryption and activity monitoring. VDRs also provide access reports that show who viewed a document and when they viewed it. This helps reduce the risk of information being released or disclosed without authorization.
In addition to providing central access to all M&A documents, VDRs help streamline and expedite the DD process with a variety of features that enhance productivity and collaboration. These include a user-friendly interface and automated folder structures and roles that are granular, allowing for precise access management.
VDRs can be a crucial tool in the M&A process, as they allow teams to work more efficiently and in a transparent manner on projects. This helps prevent bottlenecks which could delay or hinder an agreement. Additionally, VDRs make it easier for parties to share information on the progress of a project in real time by way of notifications and comments. The document indexing and search capabilities make it easy to find the information you require.