Virtual data rooms are a fantastic tool for companies who want to share confidential documents with other parties. They allow for safe and secure access to the documentation, and also ensure that the documents are not accessible by the public or copied. They are often employed in corporate transactions such as mergers and acquisitions as well as for financing processes.

For instance, the process of executing an IPO requires the use of a lot of due-diligence and document sharing with both the public and shareholders. This process involves the careful management of documents for the company and is typically subject to additional rules and regulations at the state, local and federal levels. Virtual data rooms ease the process for businesses that are looking to go public. They ensure all the needed information is made available to the right people at the appropriate time.

Startups also utilize VDRs for securing investment which requires a amount of sensitive documents to be shared. The information is typically financial in nature and includes historical and forecasted income statements and cap tables (including equity in the option pool), and relative allocations of equity in the founder between several founders. It is also common to include a roadmap that describes the strategic goals of future growth of the company.

Board members are involved in a company’s operations and need to have access to all documentation. They’re often scattered all over the world, and require a dependable platform for communication and sharing documents with the stakeholders. A good virtual data space can provide features like drag-and-drop uploads, bulk invitations, dynamic watermarking auto index numbers, and more to ensure that the process is quick and easy for all parties.