What Is a Virtual Data Room?

Virtual Data Rooms (VDRs) are software platforms that enable companies to store and share sensitive data in a secure location. It is used for due diligence during mergers and acquisitions as well in financial transactions and litigation.

The VDR market is highly fragmented with vendors offering different features and prices. The best providers offer an intuitive user experience, and support personnel who speak several languages. They also have a robust analytics feature that provides information behind the scenes about how Virtual Data Room documents are accessed.

Certain data rooms are made specifically for certain industries. The life science industry, for example requires storing and sharing documents that contain intellectual property and medical data. Litigation and audits require sharing documentation with clients. A lot of providers provide built-in functions to facilitate these processes, such as redaction (blacking out sections of files that contain personal information). The industry of immovable property needs to send contracts to contractors to help with building projects. Some vendors provide built-in functions to facilitate this, like the ability to transfer blueprints and other important documents with subcontractors in a VDR.

Ask for a free demo and then consider the ease with which it can navigate. A VDR that is difficult to use will not be effective, so test the various features before signing. Also, look into the VDR’s uptime as well as its reliability. A reliable VDR must be operational and accessible at all times with little or interruptions.