Simply put, a virtual deal is an online repository that can be used for storing and distributing documents. It is much different than typical cloud storage solution options such as Dropbox or GDrive in that it is stored on an extranet, and cannot be accessed through a typical internet connection. In addition to this, a virtual deal room has specific functions, and isn’t for storing generic documents or photographs. While virtual deal rooms do, in fact, have a number of uses, we’ve narrowed down its primary use cases to three separate but equally important functions. Read on to find out how to best use a virtual deal room.
Performing Due Diligence for Mergers and Acquisitions
While due diligence is always extensive and time consuming, the due diligence that needs to be performing during mergers and acquisitions (M&A) is usually exacerbated by the delicacy and sensitivity of the scenario. However, a virtual deal room speeds thins along for M&A’s by allowing businesses to execute deals solely online. Instead of having to meet in person to review documents or sign paperwork, a virtual deal room can virtually ensure that all assets and intellectual property are secure and accounted for. It also allows key decisionmakers on both sides of the deal to collaborate within the virtual deal room, and automate certain processes as well.
Raising Business Capital
Another great use for a virtual deal room is to raise business capital. This can apply to anything from technology companies who go through multiple rounds of funding to nonprofits who are regularly fundraising for various causes. A virtual deal room can be very helpful here in that it can make sure that financial information is secure, and allows you to share business data with those looking to invest in a business of various causes in a safe and secure manner. In addition to this, a virtual deal room offers data transparency, which can be crucial for potential investors and donors who want to see exactly where their investment is going and may want to review the particulars of an organization before giving their money to them.
Managing Legal Documents
Whether you are a law firm or just a company that handles a lot of legal scenarios, a virtual deal room can be useful to house legal documents. In doing so, it allows all parties 24-7 access to these legal documents in an organized manner where any document can be pulled up at any time to review. However, because a virtual deal room has permission-based users, only certain users that are authorized to do so can access certain documents. Permissions can also be set by both parties who have access to the virtual deal room, which adds to the level of organization. You can also upload legal documents in various file formats, making this a perfect solution for housing a variety of legal documents.
While there are certainly other uses for a virtual deal room, these three use cases are some of the primary reasons as to why you’d want to use one. If you are involved in M&A, regularly fundraise or often handle highly sensitive legal documents, then a virtual deal room is a solution you should consider for your company