When companies collaborate with their partners to develop products, build structures or offer services, they typically exchange documents, contracts, and data. Virtual data rooms enable companies to safely share this information without risking violations of compliancy or breaching standards. They also make the information easy to access, analyze and redact for all parties.

VDRs are used in a variety of situations and include M&A due-diligence. Private equity companies and funds use them to share information about their portfolios such as tax information, documents for fund management with investors. Investment banks may use additional reading them to help the buy-side and sell-side in the financial transaction by assisting by preparing documents as well as due diligence, and contract review.

During due diligence, the reliability of the VDR is critical to the success of the deal. Whether you are sharing a VDR to facilitate M&A or capital raise or another deal, make sure you choose a vendor that has proven reliability in performance and support. Ask your vendor for uptime and downtime statistics and compare these across vendors.

In addition, consider the quality of the user experience. Look for vendors that offer simple tools for users to use, such as drag and drop for bulk file uploads and at-a glance reporting. Lastly, make sure the client service representatives of the vendor understand the nuances of your company and have worked with processes like yours. This way, they’ll be able to offer quick and efficient support throughout the process.