A virtual data room (VDR) is a secure platform for software that enables collaboration and sharing of documents for different business processes. VDRs are particularly beneficial for M&A due-diligence, financing, legal processes, and other crucial projects that require the disclosure of sensitive information to a third party beyond the corporate firewall.
Some traditional VDR providers ask users to download and run the software on their desktops or use plugins for security purposes. This can slow down the process of reviewing and limit access to VDR. It can also hinder prospective buyers from participating. Modern VDRs offer a seamless user experience, with native browser support. This makes them more durable, flexible, and intuitive.
Many VDRs offer a well-organized repository for files. They also have search capabilities that can identify text within most types of documents, including PDFs and Excel documents. This sort of detailed activity tracking is especially important for M&A due diligence and fundraising as it helps administrators understand how much interest their shared documents are generating from investors or bidders.
Additionally, many VDRs permit folder-level security and user permission settings to ensure that only those who are required to view a specific document can do so. Private equity and venture capital firms utilize this feature to share reports with their portfolio companies, limited partner and investors in order to protect their confidential information and speed up the review process. In addition, pharmaceutical and biotech companies use VDRs to share quickly their intellectual property and clinical trial results with their research partners and regulators.