What Is a Virtual Data Room?

A virtual dataroom (VDR) is a cloud-based repository that stores documents and other files. It is used to securely transfer sensitive business information, for instance, during mergers and acquisitions. Due diligence processes like fundraising rounds, due diligence procedures and financial audits are frequent. Compared to traditional physical storage, VDRs provide greater control over access and security, as well as making it easier to manage costs.

When choosing a VDR provider, make sure you select one that is robust and has a comprehensive set of features to support the needs of your business. For instance, you should consider whether the software is in line with ISO 27081 standards, has powerful spyware and virus scanning, and offers a 99.9 percent uptime. Multifactor authentication can also be used to ensure the data uploaded is secure. Look for customization features, such as color-coding to help identify documents during internal meetings, and at-a glance reporting that provides executives in the C-suite with the comprehensive overview they require.

A VDR is used most often during M&A transactions, where prospective buyers look over a large amount of documents of the companies that are being sold. M&A virtual datarooms allow for an efficient due diligence process and lower risk as they limit access to confidential information only to those who require to access it. During an M&A deal, users can benefit from the This Site VDR’s FAQ section and comments. This improves productivity and accelerates decision-making. M&A VDRs also provide you with complete audit trails that are crucial for M&A diligence.