VDRs can be used in a variety of business processes that require confidential data. For example, venture capitalists often rely on VDRs when reviewing company documents in connection with investing and funding processes. 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.
In addition, a VDR eliminates the cost of photocopying and indexing, which can be time-consuming. VDRs are accessible from anywhere and can save travel costs. VDR vendors, like Ellington, tout lower upfront costs as well as the fact that all bidders can use them at the same time.
Security is paramount in a VDR, as it is with all technology systems. Look for platforms that offer a fence view feature to prevent unwanted glances. They should also provide multi-factor authorization, IP-restricted users access and a history of page-bypage document viewing. Make sure the solution is SAS 70-compliant and that data in PDF files are encrypted. Finally, check whether the vendor provides a variety of project templates and customizable branding options.