The Role of Virtual Data Rooms

A virtual dataroom enables users to access documents from any location they are connected to the internet. Dealmakers don’t have to sit for hours in a physical location examining piles and piles of documents. Instead, they can access the documents remotely, which reduces the cost of due diligence and accelerates the process.

M&A due diligence is one of the most popular use cases for VDRs. VDRs are ideal to share documents between the buy-side as well as the sell-side of these transactions.

Investment bankers are yet another common group of users of VDRs. They assist their clients in IPOs capital raising and M&A deals that often involve a lot of sharing documents. They must also be mindful of protecting confidential information, while allowing clients access to documents.

Life science companies are also a major user group of virtual data rooms. They typically work together with accountants, consultants and lawyers to design and store their confidential documents. These parties need to be in a position to access the data without compromising the privacy of any individual or causing a compliance issue.

Modern VDR has permissions that are granular and permit the administrator to control who is able to access which folder and documents in the data room. They can also limit access based on the number of times that a document been examined. They can also limit access by the time or IP address to stop hackers from gaining illegal access. Other security features include customizable watersmarks and encryption in transit and at rest and remote shredding.

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