What Is a Virtual Data Room?

What Is a Virtual Data Room?

Virtual Data Rooms (VDRs) are software platforms that allow companies to store and share sensitive data in a secure setting. It’s used to conduct due diligence during mergers and acquisitions aswell in financial transactions and litigation.

The VDR industry is highly scattered, with vendors offering a variety of features and prices. The best providers offer an intuitive user experience and support staff who speak various languages. They also provide extensive analytics that provide intelligence behind the scenes regarding how documents are used.

Some data rooms are tailored to specific industries. For example the life science industry requires documents that contain intellectual property and medical information to be kept and shared. Audits and litigation also require sharing documents with clients, and many providers provide built-in functions to facilitate these processes, such as redaction (blacking out portions of documents that contain personally identifiable data). The property industry that is immovable needs to send contracts to contractors to facilitate building projects. Certain vendors have built-in functions for this, like the possibility of sharing blueprints or other important documents quickly with subcontractors through the use of a VDR.

When evaluating data room options, ask for a free trial and then look at how due diligence easy it is to use. A VDR that is difficult to navigate will be ineffective, so ensure you test all features using the free account before making an investment. Also, consider the reliability and availability of the VDR. A reliable VDR must always be available and available, with minimal interruptions.