What is a Virtual Data Room?
A virtual dataroom (VDR) can be an online, secure platform that is used for due diligence or for confidential transactions. VDRs are purpose-built platforms designed to handle large volumes of sensitive documents. They provide increased security, advanced document organizing capabilities, and compliance. They differ from standard storage solutions for files like Dropbox, Google Drive and Box because they are special features to accelerate and streamline projects that require sharing documents.
These features include granular access permissions, real-time vectors watermarking and labels for classification that mark files. They also track activity down to the page level to reveal who viewed what and for how long. They provide detailed audit trails that are vital to ensure compliance and evidence of due diligence. They also support advanced features, such as redaction, which lets you hide personal information by obscuring out certain areas of the file, and fence view which hinders screenshots.
VDRs can be accessed by people around the world because they are hosted on the internet. This worldwide accessibility boosts competition among potential buyers and could help a company which is acquired get a higher price than it would be able to get in a local marketplace where investors are restricted to a certain region.
VDRs are a great way to gather information and collaborate on M&A plans, investment funding rounds, legal cases and more. They are cheaper than physical rooms as they only have to pay for the secure computer system and the cost of hosting the information online. They also can save money on travel costs since potential buyers can look over documents from the comfort of their offices instead of having to travel to the seller’s offices.
