A virtual data room (VDR) is an encrypted repository for documents used in business that can be accessed over the Internet by users with authorised permissions. This kind of digital platform can be used during procedures which require confidential documents to be shared, like due diligence for mergers and acquisitions (M&A) or venture capital financing. Legal firms also make use of VDRs to share documents with clients and other interested parties in legal processes such as bankruptcy, litigation, or fundraising.
VDR services include enhanced security features, including watermarking, two-factor authentication and more granular permissions controls. Users can control who can access specific documents or folders. VDRs also include a variety of advanced tools to reduce the risk of sensitive information being exposed. These include auto-redaction as well as data privacy assessments and watermarking.
Another benefit is their ability to shorten the length of time required for M&A transactions as well as other business deals, by allowing people involved to access information more quickly. Additionally, VDRs feature collaboration functions that boost productivity during the data room process, such as file annotations, Q&A sections and the ability to assign tasks.
Many VDR providers also offer top customer support, including in-app chat or phone, email, and multilingual support. They may even have help centers that include product videos. This is a major benefit over traditional cloud storage which doesn’t place the same importance on customer support. This is particularly important for M&A deals where the stakes are high and there is an immense pressure to close the deal quickly.