VDRs can be used in a variety of business processes that require confidential data. Venture capitalists rely on VDRs for reviewing company documents when it comes to investing and funding. In addition, investment banking processes like IPOs and capital raising require copious documentation exchanges that are well suited for virtual data review.
A VDR allows multiple bidders to conduct due diligence simultaneously, making the process much faster than a physical meeting would be. The ability to reach a larger audience of potential buyers will increase the likelihood of a deal being finalized faster than if it were conducted with only a few investors.
A VDR eliminates photocopying costs and time-consuming indexing. VDRs can be accessed from anywhere, which reduces travel costs. VDR vendors like Ellington tout lower up-front costs and the fact that they can be used by all bidders at the same time.
As with any technology system, security is paramount for a VDR. Look for a platform that offers a fence-view feature to avoid unwanted glances, multi-factor authentication, IP-restricted user access and page-by-page document viewing history. Ensure that the solution you choose is SAS 70 compliant, and that it encrypts data within PDF files. Check whether the vendor offers customizable branding options and a wide range of project templates.