What Is a Virtual Data Room?
Many companies use generic file sharing tools like Dropbox or Drive to share documents with partners. However they’re not designed to support the serious business processes that require transmission of sensitive information. They are often lacking features that allow you to manage sensitive files, including adjustable permission settings and auditing capabilities. These tools don’t create the professional first impression that’s required to close a deal or raise funds.
A virtual data room is a secure repository for private documents that is typically used in collaboration with business partners or transactions. Due diligence is widely used in M&A transactions and other corporate transactions that require the exchange of large quantities of documents. By keeping the documents in a VDR, they can be evaluated and commented upon by all parties at the same time. This streamlines the entire process and can save you money by eliminating the need for paper or travel documents.
Virtual data rooms offer various security features, in addition to storing and organizing data. Certain of these features are designed to prevent access to data that is not authorized, while other are designed to facilitate effective communication and increase efficiency. Administrators can limit who can view what information using a virtual dataroom with advanced permissions. They can also limit downloading, create a digital watermark, and more.
Another significant feature of a virtual data room is the ability to record activity. A VDR provides more comprehensive activity logs than services for file sharing that provide basic activity logs. This gives you more insight into the use of documents. This can be useful to monitor the level of interest generated by shared documents with prospective buyers or other investors, and guide deal-making.
