What is Virtual Data Room?
A virtual data room is an online storage space to store confidential business documents that can be accessed from anywhere with an internet connection. It gives companies secure ways to share information with various parties without disclosure of sensitive information or violating the regulations of compliancy. Virtual data rooms are often employed to aid in M&A deals, joint venture investments and other collaborative processes between business stakeholders.
Investment bankers use VDRs to assist in the preparation and review documents for M&A transactions. They also use the platform to raise capital. Startups typically rely on VDRs to evaluate the level of interest with potential investors by observing Virtual Data Rooms how much time they spend reading documents shared.
No matter what industry, when a company needs to share confidential information with third parties, it should consider using a VDR. VDRs are great for sharing files with third party, such as accountants or law firms in the course of due diligence and business transactions, litigation and other scenarios that require secure document sharing beyond a firewall.
When choosing a VDR one of the most important factors is to select one that has robust collaboration tools that allow users to discuss documents and comments in real-time. Additionally, it is essential that the VDR has granular activity reporting and the ability to search and sort by specific criteria. Additionally, the platform must be scalable and easy to configure with customizable branding, security, and user access settings.