Virtual Data Room Blog


Businesses used to keep sensitive documents secure for fear that they might be accessed by the wrong people. If this happens, it could mean the loss of business opportunities, costly lawsuits, or even data breaches and fines.

With the growth of digital technology, business owners began using virtual data rooms (VDR) to share information and documents with stakeholders quickly and safely. VDRs are cloud software solutions that permit secure, 24-hour remote access to folders and files on any device with an internet connection. These platforms provide a range of collaboration tools to facilitate dealmaking and efficient document management. They also have advanced features such as granular permissions, watermarking, and audit trails to limit the chance of accidental or malicious deletion.

The most common use case for virtual data rooms is due diligence during the mergers and acquisitions. Both sides have to review a large amount of documentation, so it’s critical to have a single platform on which the documents can be kept and reviewed easily. VDRs simplify the process of due diligence drastically reducing time-to-review.

Startups typically use VDRs to collaborate with investors and advisors during fundraising rounds, M&A, and other transactions. These platforms let startups upload and organize their documents in an intuitive system that accelerates the due diligence process. These platforms also include tools for collaboration such as commenting, Q&A zones, and task assignments for teams to work more efficiently. Cloud-based models are offered by a number of modern vendors that do not require any installation or hardware. Self-hosted software, which is installed on the servers that start up, provides more control, and could require IT resources.

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