Virtual Data Rooms for Business: Advantages and Disadvantages

Based on the release of KPMG, out dated the 1st of Sept, analysts predicted that the desire and capacity for M&A transactions among the list of most significant companies of the world would increase over the next a year. mergertechnology vdr reviews

Due diligence is often thought to be crucial to the success of a deal. In fact, it is at least a critical part of a transaction. Info room is a necessary tool for due persistence. The main function of this tool is to facilitate access and use of the data in M&A transactions, and this sharing of corporate documents must be done within an extremely secure way, of course. Physical data rooms played this role prior to the Digital Age, and virtual data rooms (VDRs) come to the management nowadays. VDR is IT-based due diligence tool, which provides many advantages, to compare with the physical rooms.

Virtual data room exists online, not inside any physical walls in some physical place, therefore classic burglar can do nothing with it. Possibly if a burglar has stolen the IT device (notebook, smartphone or something other) of the person who will be an user of virtual data room, the documents in VDR are still unreachable for that criminal, while the end user applies 2-step verification: multi-factor authentications, which contains not only the password going into, but also of at random made code sent to another device of the user. This method the actual theft or damage of the IT device not more dangerous in regard of the VDR secret content, compared to a vegetable in regard to cows.

Moreover, it is impossible to hack 256-Bit SSL Encryption, employed by some providers of VDR, and watermarking is an excellent help for security, too.

The set of a VDR advantages, over the physical data room, will depend on the position in a transaction: are you a Buyer or a Retailer?

For a Buyer, the key advantages are:

– cost benefits (travel, hotel and person-to-person meetings costs are reduced);
– time savings (due to the travel time savings, as well as the overall flexibility of the access time);
– visibility among the sides of a deal.

For a Seller, the key advantages are:

– cost savings;
– time savings;
– ease of use;
– competitive price (VDR gives the opportunity to improve the quantity of potential buyers significantly);
– legal compliance is simpler;
– security level is higher.