What Is a Virtual Data Room?

A virtual dataroom is a software that provides secure, centrally located storage of digital documents. This lets users share data with both internal and external stakeholders. Document version tracking and enhanced security are also possible.

Investment bankers use VDRs for due diligence during M&A transactions, which generally require large quantities of confidential documents to be reviewed by multiple parties. They must be able to quickly upload and review these https://boardroomsystems.com/budgeting-for-security-understanding-virtual-data-room-price-structures/ documents for the closing of a deal and they require a reliable storage space for this sensitive data. A specially designed VDR allows them to manage through a clear folder structure and powerful controls for access to documents that can be revoked immediately in the event of a transaction failing to succeed.

VDRs can also serve to audit regulatory filings and audits, which require transparency between internal stakeholders and external regulators. These projects typically require lengthy collaborations among teams working in different time zones and locations. A purpose-built VDR helps to collaborate, track activity and communicate with all stakeholders on a project by project basis without the necessity of meetings or emails.

When selecting a service Look for features such as drag-and-drop capabilities or bulk upload of files as well as support for the most popular extensions for files. You should know the level of physical security the company provides, such as offsite backups and redundancy. Find out if they’re offering the ability to apply dynamic watermarks for viewed and printed files or to limit access to certain IP addresses.