When a company wants to complete an M&A or IPO in the future, it will need to exchange a significant amount of documents with potential buyers. These documents are https://vdrdeluxe.com/what-documents-does-a-data-room-contain/ confidential in nature and should be securely stored and accessible to bidders on the deal. A virtual dataroom allows buyers to access these files without having the burden of navigating massive volumes of paperwork, or travelling to a company. A good VDR can also stop competitors from accessing these confidential documents.
In general, the data room contains financial due diligence documents like balance sheets, income statement and other reports. Additionally, there will be intellectual property due diligence documents which provide information on the company’s tangible assets, like trademarks and branding. This kind of due diligence could also include the tax due diligence section, which is necessary to identify and understand the tax liabilities of the business.
Some companies upload pitch decks or whitepapers into their data rooms. These files will provide the potential investor with an easy outline of the issue the company is solving, how they are uniquely placed to solve that problem and what they will tackle it. Founders are able to use their data room to provide information on the ongoing fundraising process, including executed legal documents and term sheets. A well-designed data room will come with a set of reporting tools that allow administrators to have a quick glance at the user’s activity. This includes what documents were viewed and at what time.