Virtual data rooms (VDRs) enable it to be easier to share important documents with third party. They are extensively used by businesses in many industries including life sciences and technology for due diligence, as well as other business-related events, like M&A capital raises, audits, strategic reviews and tenders.
A VDR provides a number of advantages over physical storage since the files can be accessed from any location connected to the internet. They are also not susceptible to physical causes of damage, like fire or floods and can be kept in a secure manner for as long as the company wants to keep them.
A VDR is typically used to facilitate M&A processes, when large quantities of sensitive documents have to be reviewed by potential buyers. During M&A due diligence the VDR allows companies to share confidential business plans, financial documents and more without having worry about their security. Permissions can be changed dynamically and detailed logs of user activities can provide valuable information about the interests each buyer.
To ensure the safety of online data, a virtual data room should have multiple layers of security that include physical and cloud security. A reliable VDR will regularly backup its servers in order to prevent data loss due to technical issues. It should also use encryption methods as well as digital watermarking, among other features that prevent hackers from accessing files. It should also be simple for teams to transfer data from different platforms to the VDR and for compliance departments to ensure access rights or revoke them as soon as users leave the company.