Many companies use generic file-sharing applications like Dropbox or Drive to share documents with partners. These tools are not designed to support business processes that require the transmission of confidential data. They are often lacking features that make it easier to handle sensitive data, such as customizable permission settings and auditing capabilities. Additionally they don’t make the professional first impression that is required to seal a deal or raise funds.
A virtual data room is a secure repository that stores private documentation that is typically used in collaboration with partners or business transactions. Due diligence is popular for M&A transactions as well as other corporate transactions that require the exchange of large quantities of documents. By having the documents stored in a VDR they can be read and analyzed by all participants at the same time. This makes the process easier and reduces costs by eliminating the requirement to pay for travel vdr software or paper copies of documents.
In addition to the storage and management of data virtual data rooms also offer a variety of security features. Some of these features were designed to stop unauthorized entry, while others were designed to enhance communication and efficiency. Administrators can decide who can see what information by using the virtual dataroom that has advanced permissions. They can also limit downloads, apply a digital watermark and more.
Another important feature of a virtual space is its logging functionality. A VDR provides more detailed activity logs than generic file-sharing services that only provide basic activity logs. This allows for greater understanding of the use of documents. This is useful in assessing the level of interest generated by sharing documents with prospective investors or buyers, and help in the process of negotiating deals.