A virtual dataroom (VDR) is an online repository that permits the safe sharing of confidential documents during business transactions. This includes due diligence, M&A, fundraising rounds and legal cases, among more. The VDR features streamlined collaboration with accelerated decision-making procedures, and compliance with the regulatory requirements.
Some VDRs have an easy-to-use interface that allows users to access files quickly and easily. Certain VDRs have a complicated interface, which requires training to be used effectively. Before deciding on a VDR platform, it’s essential to consider the needs of your team, as well as the type of work that will be performed on it.
The best VDRs include a range of efficiency-enhancing and security features which include advanced search tools, watermarking, as well as secure document sharing. Many also offer an audit trail that outlines each action a user performs and includes every agreement clicked through, video watched and document viewed. These capabilities provide transparency and accountability that is crucial, particularly in the course of regulated transactions.
Another benefit of the VDR is that it can be used to share documents and other data even when the party isn’t physically present. This is an efficient time- and cost-saving alternative to traditional methods of sharing documents, which aren’t easy to coordinate and can often delay critical business transactions and decision making. This is particularly true during M&A where parties from outside need to review documents before a deal is closed. The VDR’s centralized, collaborative platform can accelerate this process and assist investors or buyers make an informed decision in a shorter period of time.