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If a company is planning to raise funds or to enter into an acquisition or merger, due diligence requires an exhaustive review of a huge amount of sensitive documents. These include financial records, legal agreements, documents related to intellectual property, contracts and other agreements. The ability to efficiently share and manage all of these documents with the appropriate parties can dramatically speed up the process of selling and ensure confidentiality.

A virtual data room (VDR) is an encrypted and secure online repository that allows multiple parties to access, review and share confidential documents at any time. VDRs can eliminate the time-consuming and costly requirement to store sensitive documents in physical form. Unlike traditional file sharing tools dedicated data rooms provide many features like permission settings as well as auditing capabilities, watermarks and more to guard against document modifications as well as leakage of information.

The use of a Virtual Data Room can significantly accelerate the process of preparing to raise funds or complete an transaction. Investors can make informed choices by having access to a well-organized and complete set of documents. A VDR can help reduce the time required to complete due diligence.

Founders seeking to raise funding can upload budget projections, IP ownership documentation and detailed financial records to their VDR. Potential investors can look them up alongside an overview of the company and a pitch deck. This can reduce the time required to conduct due diligence and boost investor confidence.

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