If a company plans to complete an M&A or IPO the company must exchange a lot of documents with potential buyers. These documents are confidential in nature and should be stored in a secure manner and accessible to bidders of the deal. A virtual dataroom permits buyers to look at these documents without the burden of navigating huge volumes of paperwork or having to travel to a business. A well-designed VDR stops competitors from accessing sensitive https://vdrdeluxe.com/what-documents-does-a-data-room-contain/ material.
In general, the data room contains documents pertaining to financial due diligence like balance sheets, income statements and other reports. In addition there will be intellectual property due diligence files that list the company’s intellectual assets, including trademarks and branding. Due diligence could also include a section about tax due diligence, which is important to recognize and understand the tax liabilities that could be incurred by the business.
Some companies upload pitch decks or whitepapers into their data rooms. These files will provide the potential investor with an easy overview of the issue the company is solving, the way they are uniquely placed to solve that problem and what they plan to tackle it. Founders can use their data rooms to provide information on the current fundraising process. It can include executed legal documents terms sheets, capitalization tables. A quality data room will feature a set of reporting tools that provides administrators with a quick overview of user activities, including what documents were viewed and the date and time they were viewed.