A virtual data room (VDR) is an online platform that is secure and utilized for due diligence as well as transactions that are confidential. VDRs are purpose-built platforms designed to handle large volumes of sensitive documents. They provide increased security, advanced document organization capabilities, and compliance adherence. They differ from standard file storage options like Dropbox, Google Drive, and Box due to their specific features that simplify and speed up document sharing projects.
These features include granular permissions for access as well as real-time vectors watermarking classification labels that label the files. They can also track back to the page in order to determine who has viewed the page and for how long. They provide audit trails with detailed information that are crucial for meeting standards of compliance and proving of due diligence. They also support advanced functionality like redaction, which erases sections of files to protect private information from being revealed, and fence view, which prevents taking screenshots.
VDRs are hosted on the internet, ensuring people from all over the world can access them. This global access can increase competition among potential purchasers and allow a business to be acquired at a more attractive price than it could get in a local marketplace, where investors are restricted to a particular region.
VDRs can be used to collect and collaborate on information for investment fund rounds, M&A plans, legal cases and much more. They are less expensive than physical rooms as they only have to pay for the secure computer system, and the costs of hosting the information online. They also can reduce travel expenses, as potential buyers can review documents from the comfort at their workplaces instead of commuting to the office of the seller.