What Is a Virtual Data Room?

A virtual dataroom is a cloud-based platform that allows users to send documents to others and access them. It is used by businesses that require the exchange of sensitive information in a secure way. It is also a good alternative for organizations that want to collaborate with clients, investors, and partners. Due diligence, IPOs, capital raising and M&A are a few processes that usually require large amounts of document sharing.

In the past there was a requirement to physically meet in the room to discuss important documents, but this procedure has now been replaced with VDRs. These platforms are far more convenient and can be accessed on any device with an internet connection. The first step to choosing the most suitable VDR for your company is determining your goals. It is recommended to examine the reviews posted on a vendor’s website, as well as third-party assessments on sites like Trustpilot and Software Advice.

Life sciences firms often need to share R&D documents with various parties. This includes investors, partners as well as regulators. A data room can improve efficiency by giving access control that is more granular. It also can show the types of documents being viewed and how many times.

Real estate transactions typically involve copious amounts of documentation. A VDR can streamline the M&A process by allowing you to securely transmit confidential financial documents to a prospective buyer’s due diligence team. With features like redaction and “fence view” (which blacks out part of a file so that personally-identifiable information remains private), it is easy to protect documents in a data room.