The modern world has long moved to the digitalization of its activities. Now companies try to use paper documents as rarely as possible, as the important data is in the computer. However, digitally, your documents also require a high level of protection. Sharing data during the transaction through unreliable sources can lead to data leaks and their dire consequences. That’s why companies started using virtual data rooms, whose space was simply created for comfortable and secure transactions.
So what is a virtual M&A data room?
An M&A transaction is a complex process that involves two or more companies. The selling company must present to its buyer all the necessary data about its company, which includes a bunch of confidential documents. A virtual M&A data room gives you the ability to store your data of any importance in a single secure space, and share that information with your third party in the same location.
In addition, VDRs have collaboration features and other useful tools that serve to maximize the efficiency and speed of mergers and acquisitions. VDRs are now used by thousands of companies around the world.
Top reasons to use VDRs in M&A deals
Companies use virtual data room for transactions because it brings a number of advantages that no other conventional cloud storage has yet, namely:
- The ability for users to securely store their documents
You can upload literally anything to the VDR space, from financial and legal reports to intellectual property rights and trade secrets. All documents entering the VDR repository are automatically encrypted and dual authentication securely protects access to the program. In addition, access to documents can also be controlled by the administrators of the room. You, as an administrator, can deny and allow other users access to certain documents, as well as to interact with them.
- Easily collaborate with a third party, even remotely
With remote login and remote document viewing, you and your partners can collaborate even when you’re halfway around the world. Easy access from any device and OS improves the flow of information between the two parties, which in turn improves your communication. It also increases trust and improves transparency, and allows you to schedule integrations early in the transaction.
VDRs for M&As with a more complex structure, help your company reduce your work, thanks to AI features. So by automating many processes, such as automatically eliminating repetitive requests, bulk document uploads or drag-and-drop, automatic indexing, and smart document retrieval, you save time on uploading, organizing, and retrieving documents.
The less work you, your employees, and third parties have to do, the fewer distractions haunt them. A clean and organized due diligence and merger process require no unnecessary activities, it also helps speed up your deal.
- Supervise the entire process
As an administrator, you have the ability and right to observe all activities that take place in the VDR space from the outside. You can track the action of any user, any document they used, exactly what they did with it, exactly when they entered and exited the space, and so on. You can track the progress of a deal or a project that you have assigned to your employees and see the whole picture, as it really is. By doing some analysis you can find out the level of buyer engagement in the deal and possible problems that need to be fixed.