A virtual dataroom (VDR) is an online repository that allows the safe sharing of confidential documents in business transactions. This includes due diligence, M&A, fundraising rounds and legal cases, among more. The VDR allows for streamlined collaboration and speedier decision-making as well as compliance with regulatory requirements.
Some VDRs come with a user-friendly interface, allowing users to access and locate files quickly and easily. Some VDRs come with a complex interface, which requires training in order to use effectively. Before choosing a VDR platform, it’s crucial to consider the needs of your team as well as the kind of work to be carried out using it.
The top VDRs include a range of security and efficiency-enhancing functions that include advanced search tools, watermarking, as well as secure document sharing. Some VDRs provide an audit trail that documents all actions taken by the user, including each agreement that was clicked, video watched or document that is viewed. These features provide transparency and accountability which is vital, particularly during regulated deals.
A VDR can also be used to share documents and information even when the parties are not physically present. This can save time and money in comparison to traditional methods of sharing documentation, which can be difficult to coordinate and often cause delays in crucial business transactions or in the process of making decisions. This is particularly true in M&A where the parties outside are required to review documents prior to the transaction being completed. The VDR’s central, collaborative platform can accelerate this process and assist investors or buyers make an informed decision in a shorter amount of time.