A Virtual Data Room (VDR) is an online platform for software that keeps confidential documents in a safe place for easy and secure distribution across groups, especially in due diligence for deals. It is commonly used during M&A and IPOs however it can also be utilized by law companies, healthcare organizations such as life science companies real estate brokers and hedge funds, investment banks and private equity companies, and many more.
Virtual Data Rooms offer multi-level security that allows administrators control access to folders. Specifically, administrators can set privileges according to user roles and track who has access to what documents, and for the length of time. This degree of detail is essential for businesses that need to demonstrate compliance with legal and regulatory obligations.
Additionally, a reliable Virtual Data Room will include advanced search capabilities and document processing capabilities which can scan and convert handwritten or typed text, paper documents and even text stored as an image into a digitally-readable format. This allows users to locate information more easily and creates an extensive audit trail for compliance purposes.
Many businesses believe that all VDRs have the identical features. However, it is essential that they assess their needs and choose a vendor that can provide an option that will meet those needs. Before committing to a certain solution, companies should take into consideration the number of users and types and the size of the project and its length, as well as the storage requirements. Review the cost structure of the provider to confirm that it can handle every project or use case at a reasonable cost.