Investors scrutinize a number of investment opportunities every year. They have lots of questions, and need a place where they can review documents and quickly make decisions. Data rooms can make due diligence faster, reduce friction and be an advantage for both parties.

The data room allows investors to access important documents from anywhere in world. This global access increases competition for the acquisition of the business, and allows it to achieve a better deal than if the company was able to only be bought by investors from one country or region.

In most cases, when an private equity or investment banker firm is involved in a large M&A transaction that involves multiple investors as well as other third parties, they’ll make use of a VDR. The enhanced oversight offered by an investment banker VDR can ensure that everyone is working on the same project, and avoid duplication of efforts.

Investment bankers can track activities in real-time to gain a better understanding of who is involved in which projects, what there are bottlenecks and what data is missing. This is all a big aspect of assisting companies in closing M&A deals more quickly and improve overall efficiency.

The startup community is divided on whether or whether an review investor information room should be set up. Some VCs like Mark Suster, argue that having an investor data room impedes the process since it’s an excuse for investors who want to hem and haw over the details and delay a decision.