Virtual data rooms (VDRs) make it easier and more secure to share important documents with third parties. They are used extensively by businesses in many industries including life sciences and technology for due diligence, as well as other business events, like M&A capital raises audits, strategic reviews and tenders.
A VDR has several advantages over physical storage. The files are accessible anywhere connected to the internet. They are not vulnerable to physical damage such as floods or fires. They can also be stored safely for as long a company requires.
The most popular use for a VDR is to facilitate an M&A process, in which there are a lot of sensitive documents must be examined by potential buyers. During M&A due diligence it is the VDR allows companies to share confidential business plans, financial documents and more without having to be concerned about their security. Permissions can be modified dynamically, and detailed logs of users’ activities can provide valuable information about the interests each buyer.
A virtual data space must include multiple layers of protection that include physical security as well as cloud security to ensure the security of data stored online. A reliable VDR will regularly backup its servers to prevent data loss due to technical issues. It should also employ encryption methods such as digital watermarking, digital encryption and other features that discourage hackers from gaining access to files. It should be simple for compliance departments and teams to transfer data from different platforms to the VDR.