Last updated on June 26th, 2023 at 11:38 am
INTRODUCTION
The Covid-19 pandemic has caused massive upheaval in businesses world over with even established players facing massive survival challenges. The number of businesses at risk of going bankrupt or insolvent has risen dramatically. Even the best entrepreneurs fail during such monumental misfortune as Covid-19, but using the right online tools like VDR can help them manage their insolvency and make the subsequent sales process easier for them. They can also help them find the right investors who find their enterprise attractive and see value in their businesses to buy them. In such a situation Virtual Data Rooms open up attractive options for businesses on the brink of insolvency.
Due diligence process is a very crucial aspect of the insolvency process that can be conducted in a highly efficient manner by using a VDR. This is because VDRs deliver speed to the collection, analysis and authentication of data, thereby enhancing the effectiveness of negotiations in a safe, secure and cost-effective online platform. VDRs are commonly used to streamline processes of merger & acquisitions, IPO’s, non-performing loans transactions and bankruptcy processes.
VDRs particularly play an important role in insolvency as:
Highly Functional Secure Platform
A Virtual Data Room is a cloud-based document sharing and repository platform that hosts documents and important files. Using the digital data room, this data is safely distributed among other parties involved in the process. The main advantage is an ability to control all the actions of partners, including the time they access the data room, how often they view specific documents and others. The highly controlled access is the feature that makes data room inevitable for due diligence during insolvency process. It enables organised access to documents at any given time.
Proper Indexing of Data
VDRs allow proper collection and indexing of all data, this facilitates scrutinizing them easily and also find out if there are any missing documents.
Auto Allocation of Documents
Since VDRs apply sophisticated machine learning and artificial intelligence (AI), it allows automatic and accurate sorting and analysing of large volumes of documents quickly.
Customized Access to Data
Corporate information is safely kept with advanced protocols and digital tools.
VDRs allow you to control the access to your business sensitive data like who can access the documents, during what time frame, authorize to copy, edit, forward or print the data etc.
Makes Searching Easy
Advanced search and filter functions enables faster finding or referring of relevant documents only. Document evaluation becomes faster and easier.
Viewing by Multiple Parties Possible Simultaneously
Several potential bidders can simultaneously get access to documents.
Analytics and Reporting
Advanced analytics and reporting features enable a better understanding of the activities of the accessing parties or persons. This increases deal efficiency and the seller can track the activity of every bidder within the data room.
Meets all Legal Compliances
Complete compliance with international and local regulations is possible with VDR.
A VDR facilitates effective conduct of Due Diligence that can mean the difference between success and failure of your insolvency process. A VDR thus allows you to streamline your process by:
- Prepare the DD Checklist.
- Obtain signatures on Non-Disclosure Agreement and Confidentiality Agreement.
- Create a Unique System of Data Naming, under which you have full access over documents and to give permission to access required documents to prospective buyer/acquirer.
- Organize a logical table of contents, which will facilitate demarcation of the documents.
- Check the folder structure.
- Upload the files and documents in their respective folders.
- Invite users and acquirer.
- Define priorities and Deadlines.
- Conduct due diligence.
The Confiex team specializes in providing premium virtual data room solutions tailored for businesses. With their vast experience in working with document sharing platforms, they have been actively supporting the Virtual Data Room community since 2015 by offering valuable information to users free of charge.