Virtual Data Rooms

Advantages to Sellers 

+ The biggest advantage to a virtual data room for most sellers is the ability to let multiple potential buyers view due diligence information simultaneously. In the old days, a seller had to stagger visits to its physical data room, adding weeks to a deal’s timeline. While a seller could operate several physical data rooms at once, this was a costly and logistically challenging alternative. The ability to permit simultaneous viewing in a virtual data room lets a seller accelerate the pace of an auction, while also maintaining the interest and focus of multiple buyers until one candidate emerges as the lead horse later in the race.

+ The time constraints and inefficiencies of a physical data room seldom work to a seller’s advantage to the degree many sellers believe. Giving potential buyers sufficient access to information and appropriate time to analyze it can actually assist a seller in the long run. Well informed buyers often are less inclined to drag their feet in negotiations, as they race to complete follow up due diligence behind the scenes. Buyers who enjoy thorough due diligence often include smaller holdbacks in initial offering prices, put less pressure on a seller to give broader than market representations and warranties, and are more relaxed when negotiating indemnification parameters.