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The use of virtual data rooms increases every year, and while North America remains the biggest user of the technology, Europe and Asia are rapidly catching up. The growth is driven mainly by a few key factors, which all fit comfortably under the heading of due diligence.
Data room technology offers the ability to reach across borders. It speeds up processes by reducing time frames and frustrations of document access during high-level deals and gives peace of mind to all parties involved.
Sharing documents online is second nature to most of us. We need to share documents to demonstrate the work we have done, to get comments and feedback, to enable us to collaborate with our colleagues, partners, and consultants, and sometimes to get our boss to sign, scan and send us back the document so that we can record another successful sale.
Whatever the purpose, I am sure that you want to know what is the best way of sharing your documents online.
I will go through all the major options available to you to share files online:
The actions you take in the early stages of a merger or acquisition transaction through a Virtual Data Room will set the tone for the remainder of the process. This can be daunting, especially if you’re new to the environment, but by planning ahead and giving special attention to certain policies and procedures you can ensure a smooth, streamlined process.
Virtual datarooms replaced physical datarooms years ago, mainly used during the due diligence process. But it is now that we are really seeing the additional benefits of a dataroom in the early steps of a transaction:
Your
data rooms are all set up and you’re ready to enter the due diligence stage of your merger or acquisition. As was the case in the
pre-due diligence phase, the actions depend on whether the process is driven by the buyer or the seller.
In the third in our series of posts on the M&A life cycle, we’ll take a look at both options, following on from the planning done at the end of the previous stage.
Investment bankers play a key role in most Virtual Data Rooms. Their role in matching companies and assets with bidders and driving the M&A transaction is critical to make deals happen.
Investment bankers normally create significant value to their clients, especially when they focus on one specific industry for many years and are able to read and sometimes even set M&A trends.
Based on fourteen years of experience running Virtual Data Room processes, we have noticed that investment bankers play a crucial role to make the deal happen by:
Physical data rooms are quickly being replaced by virtual data rooms, partly because of the complex procedures that are necessary to protect the information held in these rooms.
Having confidential deal information in a specific location means that the parties in the deal need to travel to and from the location each time they view documents, which also results in high costs associated with transport, accommodation, premises, and security.
Another complex issue is the on-site management of the venue, which needs to be restricted to only those who are essential to the due diligence process. The use of Virtual Data Rooms over the years over its physical counterpart in many ways.
Let’s take a closer look at the procedures involved in using a physical data room:
On average 140 people search for “Virtual Data Room Comparison” globally on Google each month. There are many options when setting up a dataroom and with so much choice out there, it is easy to be overwhelmed.
In the past, we have already discussed the most common mistakes that people make when choosing a data room provider and the factors to take into account when comparing providers.
Here are some of the points that you should consider when making a decision:
