For any company that is planning a private placement and a virtual data space is an excellent way to efficiently share documentation with potential investors. This includes private documentation needed to conduct due diligence and sign off on the deal. Investors can also gain access to important information without having to travel, and reduces risk by identifying who is examining which documents and for how long.
In a due diligence process the buyer may want to review the full range of business documents that relate to the financial health of the company which includes audited reports, tax returns, and balance sheets. A virtual data room could be used to securely store all of these important documents in one place that is easy for potential investors to navigate. Moreover, the ability to define permissions at a level of the file, such as viewing, editing, and printing, and to track the activity of users with notifications that are dynamic and watermarks, aids in reducing the misuse of data and ensures that confidentiality of information.
After a deal is concluded, companies often utilize virtual data rooms to provide important investor updates on a quarterly or monthly basis. This may include detailed reporting on financial performance, as well as KPI dashboards that track how they are performing against their goals and growth patterns. The ability to create folder structures and restrict access with NDAs allows companies to effectively share this type of information with investors all over the world. Document archiving options and automated expiration of old data allow it to be destroyed prior to being accessible to unintentional third parties.