A lot of businesses use file-sharing tools like Dropbox or Drive to share documents with partners. However these tools aren’t made to support business processes that involve the transmission of confidential information. They typically lack features that allow you to manage sensitive files, such as customizing permission settings and auditing capabilities. Additionally they don’t make the professional first impression that is required to make a sale or raise funds.
A virtual data room is a secure repository that stores private documentation commonly used for collaboration with partners or in business transactions. Due diligence is popular for M&A transactions and other corporate transactions that require exchange of large amounts of documents. Everyone can view and comment on documents stored in the VDR simultaneously. This makes the process easier and helps save money by removing the requirement to pay for travel or paper copies of documents.
Virtual data rooms offer security features in addition to the storage and organization of data. Certain of these features are designed to prevent access by unauthorized persons, while others are designed to facilitate effective communication and improve efficiency. Administrators can limit who can access what data by utilizing the virtual dataroom, which has advanced permissions. They can also block downloads as well as add a watermark on electronic files, and much more.
Another major benefit of a virtual data room is the ability to record activity. A VDR provides more comprehensive activity logs than the standard file-sharing platforms that only offer basic activity logs. This provides greater understanding of the usage of the documents. This can be useful in assessing the level of interest generated by sharing documents with potential investors or buyers, and assist in deal-making.