A virtual data room (VDR) is a secure, cloud-based system that allows businesses to store and share documents online. The majority of VDRs include robust encryption technology and access control, delivering security via digital encryption that shields sensitive information from unauthorized access. VDRs can help reduce the time spent on processes, speed up transactions and improve communication.
Some of the most common instances of a VDR are mergers and acquisitions. These are situations where parties exchange huge amounts of documentation in due diligence prior to making a major deal. VDRs can make M&A easier and more affordable by removing the need send documents or travel to meetings.
VDRs are also useful in strategic partnerships, where parties work together to create new products or expand an existing business. When partners require access to information from a company it can be difficult to do this without exposing sensitive information, and possibly triggering a compliancy violation.
Security is the primary consideration when choosing the best VDR regardless of whether it’s to be used for due diligence, M&A or internal collaboration. Modern VDRs provide multi-factor authentication, advanced encrypted in transit and at rest, as in addition to audit logs and other security features that reduce risk. They also include features such as watermarking, disabled printing, and blind view to guard the confidentiality of confidential documents. This ensures that only authorized users are able to access the document, and shows a commitment towards integrity of data. The most reliable VDRs also provide user and file activity analytics that can be accessed by administrators to ensure accountability.
