What Are Virtual Data Rooms?

A virtual dataroom (VDR) provides security for businesses to keep and share confidential documents during business processes, such as M&A transactions capital raises, audits. Due diligence is the most frequent VDR use case, however they can also be used for different tasks like strategic reviews, tenders, and communications to boards.

The most important aspect of a VDR is its security, which begins with encryption of all data. The majority of VDR providers offer a variety of encryption options such as AES-256, RSA 2048 and 3DES. Most VDRs also have multi-factor authentication and two-step authentication. Most VDR providers also offer a live chat feature within the app as well as an assistance team that can speak many languages.

Modern VDRs let administrators monitor activities within the repository by providing detailed reports. You can track which documents were most viewed by whom and for the length of time. This is a valuable tool that helps to stay on track with projects and close deals.

VDRs can save you time by offering advanced features such as document indexing, granular permissions version control, and automated reminders. This means that you can eliminate manual tasks for your team, and minimizes the risk of human error during complex transactions or processes that involve lots of documents. Certain VDRs also allow you to schedule daily reports to be delivered directly to your inbox, ensuring you’re on top of projects even when you’re out of the office.