A virtual data room (VDR) is an secure digital repository used for storing and sharing sensitive company documents. VDRs are commonly used to conduct due diligence, M&A and other investment banking procedures, including IPOs and capital raises.
Many top data room VDRs offer a number of benefits for stakeholders. These include granular permissions for documents, and robust security measures, including encryption both in transit and in rest. They also offer customizable watermarks and remote shredding, as well in advanced management of files. This makes it difficult for hackers to view private data – and discourages them from trying to do so.
VDRs facilitate collaboration for due diligence by centralizing documents to be discussed and reviewed, rather than spreading them across multiple email threads. They also provide easy access to documents for those who aren’t located in the same location. This can save a lot of time during a transaction.
During M&A, a virtual data room helps buyers and investors quickly assess the potential deal with a clear overview of all the relevant documents. This reduces the number of questions posed and allows stakeholders to continue discussions about other aspects. This can accelerate M&A transactions. Virtual data rooms are also a great way for life science companies to share their R&D with potential partners or investors. This includes details of clinical trials and HIPAA compliance as in addition to medical records, patents and IP licensing. This information will help the user decide if a business is worthwhile and allow them to make an informed decision.