The Role of Virtual Data Rooms

A virtual data room permits users to view documents from anywhere with an internet connection. They eliminate the requirement for dealmakers to travel to and from piles of documents in a physical environment. They can instead access the documents from a remote location. This cuts down on the costs of due diligence and accelerates the entire process.

M&A due diligence is among the most popular applications for VDRs. These transactions require extensive document sharing between the sell- and buyers of the transaction, and VDRs are the best option to share documents in a secure and controlled environment.

Investment bankers are also a typical group of VDR users. They assist their clients with IPOs capital raising and M&A transactions that usually involve a lot of sharing documents. They must also be vigilant about protecting confidential information, while allowing clients to access documents.

Virtual data rooms are popular with life science companies. They typically collaborate with lawyers, accountants and consultants to develop and store sensitive documents. These parties must be able to access the information without compromising privacy or creating a compliance issue.

Modern VDRs offer granular permissions, allowing the admin to control who can view which folders or documents within the data room. They can also limit access by the amount of times a document has been looked at, and restrict access based on time or IP address to block hackers from gaining access. Other security features include customizable watersmarks, encryption both at rest and in transit and remote shredding.