The Facts About Due Diligence and VDR
If you are an investor looking to invest in a startup or an entrepreneur in search of venture capital funding or are an acquiring company contemplating an deal, it is vital to conduct due diligence before proceeding. This involves analyzing the company, looking into private information and carrying out the necessary investigations to ensure that the company is accurately presenting itself. Traditionally, this investigation was conducted during physical meetings or using binders of documents. Nowadays, it is done online using a platform called virtual dataroom (VDR).
A VDR lets you securely share vast amounts of confidential information outside of your company. It is suitable for M&A deals, litigation, bankruptcy, fundraising, audits, basically any place where multiple parties have to review confidential documents.
Look for features such as watermarking, multi-factor authentication, and encryption that is 256 bits strong to ensure the security of your VDR. Additionally, you should choose a platform that includes built-in infrastructure security and baked-in compliance management. A good VDR will also offer easy-to-use document management and search features that can be used to support a due diligence process and features such as bulk-structure imports, automatic indexing and permissions control.
To ensure that the information contained in the VDR is correct, select a platform with robust visualization and data analytics tools. These tools can be useful in comparing and analyzing the performance of one company against other, like profit margins over time. They can also assist in identifying areas that could require more research.