What Are Virtual Data Rooms?

A virtual dataroom (VDR) allows businesses to securely save and share documents in the cloud. The majority of VDRs feature robust encryption technologies and access controls, providing the security of a digital fortress, which protects sensitive information from being accessed by anyone else. Because of this, VDRs can aid in streamlining processes, speed up deals and boost the effectiveness of communications.

Some of the most common uses for VDRs VDR are mergers and acquisitions, where parties exchange a large amount of documents during due diligence before making a major deal. VDRs can aid in making the process of M&A much faster and more cost-effective email security by eliminating the need to send documents in physical form or travel for meetings.

VDRs are also beneficial for strategic partnerships, in which parties collaborate to develop new products or expand an existing business. When partners require access information from a company, it can be difficult to do so without exposing sensitive information and potentially causing a compliancy violation.

For due diligence, M&A, or internal collaboration, the most crucial factor when choosing a VDR is security. A majority of modern VDRs have multi-factor authentication, advanced encryption both in transit and at rest, audit logs and other security measures to mitigate risk. They also offer features like watermarking disabled print, and blind viewing to safeguard the privacy. This ensures that only authorized users have access to the document and proves the integrity of data. The most reliable VDRs also provide data on file activity and users that can be accessed by administrators to ensure accountability.