For companies planning to make big decisions such as M&A transactions or capital raising, it’s crucial that all the pertinent information is available. This can involve scouring through hundreds of thousands of highly confidential documents that could be susceptible to data breaches, and other security threats. There is a solution which offers easy access and secure document storage, and collaboration tools. It’s referred to as the virtual data room (VDR).
A VDR is a software for business tool that facilitates simple and secure, transparent information sharing in due diligence processes. It’s specifically designed for the M&A, private equity and investment advisory sectors, but can be used by any company looking to make an important deal or undertake a project. It’s typically a secure cloud repository that contains important documentation including financial statements, legal agreements and IP protection documentation.
The most effective VDRs are those with a an organized folder structure that makes it easy to navigate. They also come with customizable security features that allow you to limit user access by creating timeouts or auto-expiration, placing restrictions on printing, viewing or downloading documents, and also generating reports about document activity.
VDRs are usually hosted in data centers of the highest quality that contain physical security measures, such as offsite data backups, fire suppression, and biometric access control. They also are accessible worldwide, allowing buyers and investors to access important documents without having to visit the company’s headquarters.