Virtual Data Room Blog

A virtual data room (VDR) is an online secure repository that allows users to upload, track and share sensitive documents with third-party users outside the firewall of their company. The data is then accessible at any time via the internet or through a dedicated application. Virtual data rooms are becoming more important in many business transactions and processes. This article explains why it is the case, and offers suggestions on how to select an appropriate provider.

When selecting a data room, it’s crucial to know the requirements of your business use case. For instance, if you’re planning to conduct an M&A deal, it’s essential that the platform supports due diligence and collaboration with both sell-side and buy-side parties. The platform should be able to track every single activity and offer customizable permission profiles. This will ensure that only the appropriate people can access your personal files.

Another popular use for VDRs is sharing market research and investment memos with venture capital and private equity firms during the funding round. This will make the process easier and ensure that investors have precise information about the business. Additionally, a lot of VDR providers permit businesses to create a portal for public use to send documents to prospective clients and partners. This is particularly beneficial in M&A situations where it’s important to build trust with potential investors.

It is important to consider the cost of subscriptions versus one-time transactions when you compare VDRs. Many vendors offer subscriptions with unlimited use that allows users to begin, stop and make multiple data rooms available on demand.