A virtual data room, or VDR, is a storage space of documents and information related to business transactions. It is accessible through an extranet connection managed by the VDR administrator. Administrators can enable or deactivate specific user access. Administrators are able to remove or add folders, reorganize the folder structure, establish expiration dates, and even add new folders. They can also watermark documents and pages to stop download or print.
A VDR is used by many different stakeholders in many different transactions and business processes. Mining & Energy companies share huge volumes of due diligence documents for impact assessment, and bid management. VDRs enable these companies to share and track documents in a secure online environment. Advanced VDRs also allow for flexible settings of permissions to ensure that third parties only have access to documents that they need to see, and not sensitive or confidential ones.
During the M&A process, VDRs allow for the quick and secure sharing huge volumes of documents between potential buyers and sellers. Additionally, the advanced features for searching and versioning that are available in a VDR aid in speeding up and simplify the due diligence process.
During fundraising rounds startups as well as other companies utilize VDRs for storing and sharing documents with potential investors. The collaboration features of a VDR such as document annotations and Q&A sections allow for more efficient communication between all stakeholders. The VDR’s tracking and monitoring features help prevent leaks and ensure only the intended audience has access the documents.