A virtual data room (VDR) is a secure, cloud-based platform that allows businesses to store and share documents online. Most VDRs come with advanced encryption technology and access control, which creates an online fortress that protects sensitive information from being accessed by unauthorized persons. VDRs can help streamline processes, speed deals and enhance the efficiency of communication.
VDRs are commonly employed in mergers and acquisitions where parties exchange large volumes of documents during due diligence before making a major deal. VDRs can aid in making the process of M&A much quicker and efficient by eliminating the need to mail physical documents or travel to meetings.
VDRs are also useful in strategic partnerships, where two parties collaborate to develop new products or expand an existing business. When partners need to access the data of a company it may be difficult to do so without divulging sensitive information, and possibly triggering the company to be in violation of its compliance.
Security is the primary factor to consider when selecting the best VDR regardless of whether it’s to be used for due diligence, M&A or internal collaboration. Modern VDRs have multi-factor authentication, advanced encryption both in transit and at rest as in addition to audit logs and other security features to minimize risk. They also provide features such as watermarking, printing disabled, and blind view, which help protect the confidentiality of confidential documents. This ensures that only authorized users have access to the document, and also shows a commitment to data integrity. The most reliable VDRs offer analytics on user and file activities that administrators can access for accountability.