The Role of Virtual Data Rooms

The Role of Virtual Data Rooms

A virtual dataroom permits users to access documents from anywhere they connect to the internet. Dealmakers don’t have to spend their time in a physical location looking over piles and piles of documents. They can instead access the documents remotely. This reduces the cost of due diligence and increases the speed of the process.

M&A due diligence is one of the most common scenarios for VDRs. VDRs are perfect to share documents between the buy-side and sell-side of these transactions.

Investment bankers are also a typical group of VDR users. They help their clients with IPOs as well as capital raisings and M&A transactions that usually require a significant amount of sharing documents. They also have to be concerned with protecting confidential information while allowing clients to look through documents.

Virtual data rooms are popular with life science companies. They usually collaborate together with lawyers, accountants and consultants to develop and store sensitive documentation. They must be in a position to access the data without potentially breaching privacy or creating an issue.

Modern VDR offers granular permissions that allow the admin to control who is able to access the folders and documents in the data room. They can also restrict access based on the number of times that a document has been examined. They can also restrict access by the time or IP address in order to prevent hackers gaining illicit access. Other security features include customizable watermarks and encryption while during transit and in rest and remote shredding.

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