Due diligence is required when a business prepares to raise money or make an acquisition or any other transaction. It requires a thorough analysis of numerous sensitive documents. This can include financial records as well as contracts, legal agreements, and intellectual property documents. The ability to efficiently share home and manage all these documents with the appropriate parties can dramatically accelerate the process of negotiating and protect the confidentiality of the information.

A virtual data room (VDR) is an encrypted and secure online repository that enables multiple parties to access, review and share confidential documents at any time. VDRs can eliminate the time-consuming and costly requirement to store sensitive documents in physical form. Unlike traditional file sharing tools dedicated data rooms come with a number of features including access settings, auditing capabilities and watermarks to stop document modification and information leakage.

The use of a Virtual Data Room can significantly speed up the process of preparing to raise funds or to complete the transaction. By providing investors with easy access to a complete and well-organized set of documentation, it can help them make an informed investment decision. A VDR can cut down on the time needed to complete due diligence.

Founders looking to raise funds can upload detailed financial records, IP ownership documentation, and budget projections to their VDR. These can be viewed by potential investors in conjunction with the pitch deck and a company overview. This will reduce the time needed to conduct due diligence and increase investor confidence.