What Are Virtual Data Rooms?

A virtual data room (VDR) is an encrypted, cloud-based platform that allows businesses to store and share documents online. Most VDRs feature robust encryption technologies and access control systems, offering the security of a digital fortress, which protects sensitive information from being accessed by anyone else. VDRs can simplify processes, speed up deals and improve communication.

VDRs are typically employed in mergers and acquisitions where parties exchange large quantities of documents during due diligence before making a big deal. VDRs can make the process of M&A significantly faster and more cost-effective by removing the need to send documents in physical form or travel for meetings.

VDRs can also be useful for strategic partnerships, where parties collaborate to develop new products or expand an existing business. If partners require access to information from a company it can be a challenge to do so without divulging sensitive information, which could result in the company to be in violation of its compliance.

Whether it’s for due diligence, M&A, or internal collaboration, the most important aspect to consider when selecting the right VDR is email security security. Many modern VDRs feature multi-factor authentication, advanced encryption in transit and at rest, audit logs, and other security measures to mitigate risk. They also offer features like watermarking, disabled printing, and blind view to guard the privacy of confidential documents. This ensures that only authorized users are able to access the document and also shows a commitment to integrity of data. The most reliable VDRs provide statistics on file and user activity that administrators can access for accountability.