A virtual data room (VDR) is a secure online platform that is used for due diligence and confidential transactions. VDRs are purpose-built platforms designed to handle large amounts of sensitive documents. They offer increased security, advanced document organizing capabilities, and compliance adherence. They differ from common storage options like Dropbox, Google Drive, and Box due to their special features that streamline and speed up the process of sharing documents.
Some of these features include the ability to grant granular access rights, real-time vector watermarking, and labels that are used to classify files. They also track activity right down to the page level to reveal who was able to view what and for how long. They provide detailed audit trails which are essential for meeting compliance requirements and providing proof of due diligence. They also have advanced features like redaction that allows you to hide personal information by blacking out certain areas of the file and fence view that prevents screen shots.
VDRs are hosted on the internet, ensuring users from around the world can access them. This worldwide accessibility can boost competition among potential purchasers and help a company to be bought at a greater value than it could in a local marketplace where investors are restricted to a specific region.
VDRs can be used to collect and share information for investment fund rounds, M&A plans, legal cases and much more. They are cheaper than physical rooms as they only have to pay for the secure computer system and the costs of hosting the data online. They also reduce travel costs as potential buyers can review documents in the comfort of their workplaces, rather than needing to travel to the office of the seller.