Virtual data rooms (VDRs) help make it easier and safer to share important documents with other parties. Companies across many industries, including life sciences and tech are using them for due diligence as well as for other business events like M&A capital raisings, audits and strategic reviews.
A VDR has several advantages over physical storage because the files are able to be accessed from anywhere through an internet connection. They are not susceptible to physical damage such as floods or fires and can be stored securely for as long as a company needs.
The most common use for a VDR is to assist in an M&A process, where there are a lot of sensitive documents need to be examined by potential buyers. In M&A diligence this VDR lets businesses communicate confidential documents, such as financial documents, business plans and more, without having to worry about their security. Permissions are able to be changed rapidly, and detailed user activity logs can provide important insights into the needs of every buyer.
A virtual data room should have multiple layers of protection that include physical security as well as cloud security to ensure the security of data that is stored online. A reliable VDR will regularly backup its servers in order to prevent data loss in the event of technical problems. It should also utilize encryption methods such as digital watermarking, digital encryption and other features that deter hackers from accessing files. It should be easy for compliance teams and teams to transfer data from different platforms to the VDR.