What Types of Documents Can Be Stored in a Data Room?
When a company is planning to complete an M&A or IPO and IPO, it must exchange a number of documents with prospective buyers. These documents should be kept secret and safe and accessible to those bidding on the deal. A virtual dataroom permits buyers to access these files without having the hassle of handling huge volumes of paperwork, or travelling to a business. A well-constructed VDR protects competitors from gaining access to sensitive information.
Generally, the data room is usually filled with financial due diligence documents that are audited and include balance sheets and income statements, as well as other reports. There will also be files for intellectual property due diligence that detail the intangible assets of a company, such as trademarks branding, trademarks and more. Due diligence can also include a section about tax due diligence, which is vital to determine and comprehend the potential tax liabilities of the business.
Some companies also upload pitch decks and whitepapers to their data rooms. These documents provide the potential investor with an easy outline of the issue the company is solving, why they can best solve the problem and what they are planning to take action to solve it. Founders are able to use their data room to provide information about the current fundraising process, including documents that have been signed by lawyers and term sheets. A well-designed data room will have a suite tools for reporting that give administrators a quick review of user activity. This includes which documents were viewed and at what time.
