VDRs provide a simple and secure way to share private files with third parties during due diligence for M&A partnership, capital raising as well as asset sales. They remove the cost, hassle and risk that comes with sharing large documents via email or fax, and enable the users to access their files on demand with no need to print or travel to view materials.
Investment bankers make use of virtual data rooms most often, because they assist clients with strategic partnerships requiring large amounts of information to be exchanged and stored. Capital raising and IPOs, for example, demand huge volumes of documentation that require a high level of security and organization. VDRs are ideal for these processes as they allow leadership to control access and share data.
The best VDR providers offer industry-leading security technology, including multi-factor authentication (MFA) to verify user identity and permissions settings for file and document access. This blocks unauthorized users from gaining access and allows executives to set up strict controls to ensure that only the parties involved in a transaction have access to the information they need to perform their jobs. Also, make sure that the provider’s servers are located at world-class data centers that have multiple levels of redundancy to ensure security and uptime. It is essential to confirm that the provider’s support team is available 24/7/365, to answer any questions or provide assistance as soon as you need it.