When you’re ready for selling your business, you will need to share a large number of documents and files. A data room (or due diligence virtual data room) lets you consolidate and share all your information with potential buyers during the due diligence process.
Venture capital firms generally require a review of corporate documents (including contracts, stock and option paperwork, and other agreements) of a startup prior to making an investment. These exchanges are usually completed through a data room where legal departments can review and access the documents.
A VC dataroom offers investors information on a company’s assets, such as trademarks, patents and R&D investment. It also helps prospective investors understand the financial state of a company by providing financial documents such as financial statements for profit and loss along with audits of the past, as well as cash flow projections.
It’s important that you choose a data room with a solid, secure infrastructure in the event of M&A. Data room providers should offer a high-level of security, including activity tracking and encryption of data to ensure that information isn’t printed or altered. It should also allow users to select which files and folders to browse or download. For instance, iDeals offers eight different permission levels for uploaded files, which you can customize according to specific roles and projects.