If your business is thinking of an investment in a private placement (PP) in the near future, you’ll have to share important documents that are confidential with prospective investors or partners. Instead of relying solely on email and spreadsheets, using a virtual data room is an attractive alternative that provides an organized and secure place to share information with several parties.
Preparation for PPM: You could build an online document library that has permissions customized for every prospective investor/partner, and track usage metrics to assess the level of interest. Access expiration, dynamic watermarks print only and view permissions as well as view-only permissions can help protect against unauthorized use of sensitive documents. Physical Security The VDR provider should have industry-standard data centers that have multiple backups, offsite storage redundancy, fire security, and biometric access. They should also have granular access controls including forensic auditing, forensic auditing, and multi-factor authentication.
Investing in your own company: You can include confidential revenue forecasts and IP ownership documents to give potential investors an accurate view of the growth prospects of your business. You can also include an updated cap table to illustrate how equity is distributed between the founders and investors who are already in place. This can speed up the due diligence and allow you to move faster towards a termsheet.
A virtual dataroom also facilitates collaboration between internal teams as well as external partners by allowing users to submit specific questions regarding documents in a specific section. The responsible person can answer questions as soon as it is possible. This reduces the time spent in searching for information within emails or sending files that could be lost.
www.gamedataroom.com/why-do-we-need-a-virtual-data-room-for-mergers-and-acquisitions/