What is a Virtual Data Room?
A virtual dataroom is a safe online repository that allows you to keep and share confidential information. It allows companies to easily control access to files even when they are shared outside of the firewalls of their company. It also provides a secure method for parties to collaborate and communicate in the course of a deal, even if they are located in different geographical locations.
VDRs are replacing outdated technology such as physical data rooms email, cloud storage and physical data rooms due to a variety of reasons, including their outstanding security, ease-of-use and low cost. The right service provider can provide additional features to simplify and streamline business processes and complex projects.
The most important feature of the VDR is security. The best providers ensure security measures are in place throughout the entire duration of a transaction or project. The most advanced solutions protect documents at source to prevent leaks of data. Some solutions allow administrators to set an expiration date or terminate remote access to stop document disclosure. Furthermore, the most secure virtual data rooms have multiple copies of all uploaded documents stored in different locations to guarantee they are not lost or damaged.
The most commonly used uses for VDRs include M&A due diligence as well as restructuring or bankruptcy legal cases and general collaboration. For instance private equity funds and firms use VDRs to share portfolio information as well as tax information and documents for investors in a secure environment that is accessible 24/7 to ensure transparency. Additionally, law firms can effectively communicate with clients, external experts and stakeholders by using VDRs that have Q&A and comment sections.