A virtual data room (VDR) is an encrypted, cloud-based repository for the sharing of confidential documents and other information during business transactions. These include due diligence, M&A, fundraising rounds and legal cases, among more. The VDR includes streamlined collaboration with accelerated decision-making procedures, and compliance with the regulatory requirements.
Certain VDRs come with an intuitive interface, which allows users to locate and access files quickly and easily. Some VDRs feature a complex interface that requires training to use effectively. It’s important to take into consideration the needs of your staff and the kind of work is performed using the VDR platform prior to deciding on one.
The top VDRs have a wide range of efficiency-enhancing and security features which include advanced search tools, watermarking, and secure document sharing. Some also provide an audit trail which outlines every step a user makes and includes every agreement clicked through, video watched, and document read. These tools provide transparency and accountability, which is important when dealing with regulated contracts.
Another key benefit of the VDR is that it can be used to share documents and other data even if the person sharing the information isn’t physically present. This is a time- and money-saving alternative to traditional methods of sharing documents, which aren’t easy to coordinate and can often delay crucial business transactions and decisions. This is especially true for M&A where external parties must review the documentation prior to the deal being concluded. The VDR platform’s centralized, collaborative approach can help investors and buyers make better decisions in less time.
