What Is a Virtual Data Room?
A virtual dataroom (VDR) is an online repository that holds documents and other files. It can be used to transfer sensitive business information, like during mergers and acquisitions. Due diligence processes, fundraising rounds and financial audits read more are also common. In comparison to traditional physical storage, VDRs provide greater control on access and security while making it easier to manage costs.
When choosing a VDR provider, be sure you select one with a robust and broad set of features that satisfy the needs of your business. Take a look at, for instance, whether the platform is in compliance with ISO 27081 standards, has strong virus and spyware scanning, and offers the 99.9% uptime. Multifactor authentication can be used to ensure the data uploaded is safe. Additionally, look for customizable options like color-coding to make it easy to identify specific documents during internal meetings and in-depth reports that provide C-suite execs the high-level overview they need.
The most frequent use of the VDR is during M&A deals where buyers are required to review extensive documentation for the companies that are being sold. M&A virtual datarooms facilitate an efficient due diligence process, and also reduce risk, as they limit access to confidential information only to those who are required to see it. During an M&A deal users can benefit from the VDR’s FAQ section and comments. This boosts productivity and speeds decision-making. M&A VDRs also offer complete audit trails that are essential for M&A diligence.