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During a transaction, the seller must ensure that the correct document has been presented and that due diligence was carried out. This is where a VDR’s built-in versioning controls and tagging tools can help. These tools allow buyers to confirm that they have read the correct version of a file and can ensure that deals are on the right track with an accurate audit.
Companies may require sharing sensitive information with third organizations when they are preparing for a commercial product launch or an IPO. A VDR is the best way for these parties to be free of worries about leaks of data, to look over and collaborate on documents. The best VDR providers offer watermarking with 256-bit encryption, multifactor authentication and baked-in security for the infrastructure. They also offer invitation delay, adjustable viewing rights, and automatic indexing.
Mergers and Acquisitions (M&A) that involve sharing large volumes of confidential data with potential buyers, are among the most common uses for VDRs. VDR. This process is made easier and more efficient for both parties by using a VDR. It also helps protect confidential information in the event that the deal is not successful.
Selling a business can be complex and requires the presentation of a Financial Model, Information Memorandum and other important documents. A VDR lets the seller securely share these documents with prospective buyers, who sign a non-disclosure contract prior to reviewing the documents. This simplifies the process by reducing meetings and paperwork. It also cuts costs by eliminating the need for travel and other expenses.