Financial reporting Available in the Virtual M&A Data Room

Virtual data rooms are now arousing great interest from companies beyond the theme of due diligence and are also used outside mergers, acquisitions and real estate transactions for secure, cross-localization and cross-company data exchange and online collaboration. Be it with customers, business partners, from the home office or in project teams. Previous solutions such as email, FTP servers or complex software applications such as SharePoint or cloud storage services are either too insecure or overwhelm users and require significant IT management efforts. At the same time, compliance requirements in companies increase with regard to data security – also when data is exchanged across company boundaries. A virtual data room offers the highest level of security when exchanging data by encrypting the data during transmission and storage, user-specific access rights, extended document protection, such as watermarks, and complete logging of all activities in the data room.

What is a Virtual Data Room in Due Diligence?

A VDR is a secure online data storage facility for storing and distributing data. VDRs are used when strict confidentiality of data is required, with the ability to distribute it to a wide range of users. Virtual m&a data room has many advantages over physical data room. Benefits such as 24/7 data availability from any device anywhere in the world, data management security and cost efficiency. VDRs are used in many industries, including biotechnology, information technology and telecommunications, investment banking, accounting, government, business brokerage, and more.

How can you use a VDR for due diligence?

For all internet users, VDRs have become the norm once they switch cabinets or physical media. Physical data cabinets and physical media had limitations and were time-consuming and inconvenient for the parties involved. With the development of the internet, the physical spatial data and media are an outdated concept.

Following are the most common uses of VDRs:

  • internal storage of documents;

  • communication board;

  • secure document exchange;

  • mergers or acquisitions;

  • fundraising;

  • first public offering;

  • strategic cooperation;

  • exams;

  • increase in venture capital;

  • intellectual property management.

The check list in the data room for due diligence

When setting up a VDR, this checklist can be helpful for various aspects of your business.

The checklist for legal due diligence

Each company has a set of documents related to agreements with suppliers and other companies. These are files needed to show what the business is capable of, the scope of business it handles, and many other activities related to the legal side of the business.

The audit list e for the financial due diligence

A company’s financial statement is one of the first places potential customers look for information. In order for this inquiry to be as transparent as possible, the following financial documents should be provided:

  • strategic growth plans;

  • ongoing strategies;

  • annual accounts;

  • details of bank loans.

The human resource due diligence checklist

The number of employees, associated policies and health insurance are all part of personnel records. To prepare for due diligence, the company should have HR documents such as:

  • policies for medical purposes, – sick leave, overtime and vacation;

  • training program documents;

  • data on employee (i.e. cv);

  • terms of employee benefits.

Intellectual Property Due Diligence Checklist

Patents and trademarks are part of a company’s intellectual property rights. To demonstrate that you have organized each document, you must show the interested party the following intellectual property files:

  • correspondence with relevant regulatory authorities;

  • reports related to the process;

  • intangible agreements.

Virtual computer space tools allow companies to demonstrate transparency in all areas of business, from legal to intellectual property. Ultimately, VDRs provide a secure way to visualize the data needed for a successful end-to-end due diligence process.