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What is a Virtual Data Room?
A virtual dataroom (VDR) can be an online, secure platform that is used for due diligence or confidential transactions. VDRs are specifically designed platforms to handle large amounts of sensitive documents. They offer greater security and compliance adherence as well as advanced features for document management. They differ from common file storage options like Dropbox, Google Drive, and Box due to their specialized features that streamline and expedite document sharing projects.
Some of these features include the ability to grant access in granular increments and real-time vector watermarking and labels for classification to mark files. They also track activity right down to the page level to reveal who viewed what, and for how long. They provide detailed audit trail that is important to ensure compliance and evidence of due diligence. They also provide advanced features such as redaction that allows you to conceal personal information by blocking out specific areas of files and fence view that stops screen shots.
VDRs are accessible to people around the world because they are hosted on the internet. This global accessibility increases the competition between potential buyers and could help a company being acquired get a better price than if it had to get in a local market, where investors are limited to the region.
VDRs can be used to gather and share information for investment funding rounds, M&A plans, legal cases and much more. They are less expensive than physical rooms as they only have to pay for the secure computer system and the cost of hosting the information online. They also can reduce travel expenses as buyers are able to look over documents from the comfort of their own offices instead of traveling to the seller’s offices.