a common use case for a VDR. Merging with or acquiring other businesses involves a lot of research, and particularly the furnishing and review of volumes and volumes of documents. For companies merely entertaining a purchase offer, it can be daunting to hand over the sensitive data that will be requested. Thus, companies heavily engaged in M&A can still participate in negotiations and allow for the safe viewing of valuable, confidential data by relying on a purpose-built VDR. And, in the event that a deal does not close, access to the data room can simply be terminated.
For both startups and larger enterprises, engaging in various fundraising rounds is often key to growing a business. And, as many entrepreneurs know, convincing investors to fork over heaps of cash is not exactly an easy feat. In general, fundraising mandates a great deal of data and document sharing, especially during the due diligence investigation. During these fundraising phases, using a VDR can drastically facilitate the requisite exchange of sensitive information, and leadership teams on both sides of the deal should feel comfortable given that using a VDR will allow for better control and oversight.
IPOs can be particularly onerous transactions, as the decision to go public means that companies will be subjecting themselves to additional rules and regulations, often at the local, state, and federal level. In addition, this transition requires more transparency for the public and prospective shareholders. In order to go through all of the necessary steps to launch and survive an IPO, meticulous document retention and management will be key, which utilizing a VDR obviously allows.