A virtual dataroom is an online repository that allows documents to be kept, distributed and tracked under the direction and discretion of the administrator. This is a great way to support complex projects and business processes that involve the disclosure of confidential documents to third parties who are not inside the firewall.
The most commonly used use for online data rooms is for M&A transactions to facilitate the extensive due diligence process that buyers normally take on. The ability to store all relevant documents in one place enables faster and more efficient review and ensures confidentiality is preserved.
Investment banks are the most frequent users of VDRs they assist both sides of the buy-side as well as the sell-side in financial transactions such as mergers and acquisitions. They often need to access and look over large amounts of sensitive files, which requires reliable storage and easy collaboration between multiple stakeholders across various locations and time zones.
Life science companies work in highly controlled environments, with multiple investors and partners as well as having to provide a large amount of sensitive documentation on a regular basis. They frequently need to raise money or prepare for an IPO. VDRs provide a secure platform for collaboration and sharing, with detailed activity tracking that makes it easy to determine who has accessed what documents.
Top data room providers offer many features to simplify document management and collaborative work. These include a simple user interface, a simple multi-project management with the ability to customize permissions for each user, and a 24/7 support team. Many data room providers offer flexible pricing, including an annual subscription that allows for an affordable price per project and the ability to start or pause projects at any time.