What Is a Virtual Data Room?

vdr

A virtual data room (VDR) is a specially designed platform for secure sharing of documents and due diligence. This is distinct from consumer-oriented file-sharing apps like Dropbox or Google Drive that aren’t designed for use in business environments that require increased security and compliance.

M&A: If a company is considering an acquisition offer or is required to share sensitive data with prospective buyers in any other manner, VDRs are a great tool to monitor activities and grant access. A VDR that has robust activity tracking allows administrators to see, for example, who has accessed files and the date they were accessed. This helps to ensure that no one has access to confidential documents without authorization. The ability to immediately revoke access is useful if the deal does not conclude.

Private Equity & Venture Capital – The process of raising capital typically requires multiple rounds with sophisticated investors. A web-based VDR allows companies to securely share financial documents and records with investors while maintaining control over the information.

A VDR can be used to sign e-Signatures on contracts and other documents. This eliminates the need for draft documents to be exchanged via email or an outside eSign service, which can increase security dangers. In addition, the majority of modern VDRs support the use of granular security settings for folders and files, and can apply real-time vector watermarking, classification labels and permissions to restrict access by unauthorized users. They can also produce reports and analytics to go to these guys assist administrators keep track of data activity.