What Is a Virtual Data Room?


A virtual data room (VDR) is a specially designed platform to secure document sharing and due diligence. This is different from the popular applications for sharing files like Dropbox or Google Drive that aren’t designed for business use cases requiring enhanced security and compliance.

M&A when a business is contemplating an acquisition, or needs to share sensitive data with prospective buyers in any other way, VDRs are a great tool to monitor activities and grant access. A VDR that has robust activity tracking allows administrators to be able to see, for instance who has accessed files and when they were used. This can help ensure that nobody has seen confidential documents without authorization. The ability to oldetowntimes.net/ revoke instant access is useful in the event that the transaction does not conclude.

Private Equity & Venture Capital – Getting capital raised can require multiple rounds of highly sophisticated investors. A VDR online enables companies to securely exchange financial records and legal documents while maintaining control of the information.

A VDR can also support e-Signature of contracts and other documents. This eliminates the need for draft documents to be exchanged via email or a third-party eSign service, which can pose additional security dangers. In addition, many modern VDRs provide specific security settings for folders and files and are able to apply real-time vector watermarking, classification labels and permissions to limit unauthorized access. They can also generate reports and analytics for administrators to keep tabs on the activity of data.

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