A virtual data room is a digital repository for storing and distributing documents that can be organized, shared and tracked at the administrator’s discretion. This makes it ideal for supporting complex projects and business processes which require the disclosure of confidential documents to third parties outside of the firewall.
Online data rooms are most often utilized in M&A transactions, in order to assist buyers with their extensive due diligence. All relevant documentation being in one place allows for a faster and more efficient review, and helps ensure confidentiality.
Investment banks are among the biggest users of VDRs. They can be used by both the buy-side as well as sell-side in financial transaction processes such as mergers and acquisitions. They are required to review and access a large number of sensitive documents, which requires secure storage and collaboration between several stakeholders across various time zones and locations.
Life science companies operate in highly controlled environments, with many shareholders and partners. They also have to share sensitive information on a daily basis. They typically have to raise funds or prepare for an IPO. VDRs offer a secure environment for collaboration and sharing, with detailed activity tracking for users to track who has accessed the documents.
Top data room providers provide a variety of features that simplify document management and collaboration. They include a simplified user interface, simple multi-project management with the ability to personalize permissions for each user, and a 24 hour support team. Many data room providers offer a variety of flexible pricing, including an annual subscription that gives the possibility of a lower cost per project as well as the flexibility to begin or stop projects at any point.