A virtual dataroom (VDR) allows companies to save and share documents in the cloud. Most VDRs are equipped with robust encryption technology and access control systems, creating digital fortresses to guard sensitive information from unauthorized entry. VDRs can help to streamline processes, speed deals and improve effective communication.
VDRs are commonly used in mergers and purchases where parties exchange large quantities of documents during due diligence prior making a big deal. VDRs can help make M&A more efficient and less expensive because they do not need to send documents or travel to meetings.
VDRs are also useful for strategic partnerships, where two parties collaborate to develop new products or expand an existing business. When partners need to access a company’s data it can be difficult to do so without exposing sensitive information and potentially causing an unintentional violation of compliance.
Security is the primary aspect to consider when selecting a VDR whether it’s intended to be used for due diligence, M&A or internal collaboration. Many modern VDRs offer multi-factor authentication, advanced encryption both in transit and at rest, audit logs and other security measures to minimize the risk. They also provide options such as watermarking, disabled printing, and blind viewing to safeguard the privacy. This helps ensure that only authorized users have access to the document and shows a commitment to data integrity. The most reliable VDRs provide statistics on user and file activity that administrators can access to monitor accountability.