The most common use of VDRs is to facilitate M&A procedures, but they are also useful for other business processes involving confidential data. Venture capitalists use VDRs as a tool to review documents of companies in connection with investment and funding processes. In addition, investment banking processes like IPOs and capital raising require copious documentation exchanges that are well suited for virtual data review.
A VDR enables multiple bidders simultaneously to conduct due-diligence, making the entire process much faster. A wider pool of buyers can be found, increasing the likelihood that the deal will be completed sooner than if only a small group of investors were involved.
A VDR can also save time and money by eliminating the need for photocopies and indexing. It is also possible to access the VDR from anywhere. This can virtual data review reduce travel costs. VDR vendors, like Ellington, tout lower upfront costs as well as the fact that all bidders can use them at the same time.
As with any technology system, security is paramount for a VDR. Look for a VDR platform that has a fence-view option to prevent unwanted glances, multifactor authentication, IP restricted user access, and a page-by-page history of document viewing. Make sure the solution is SAS 70-compliant and that data in PDF files are encrypted. Check if the vendor offers a variety project templates and customizable branding.