A virtual data room (VDR) is an extremely secure software platform that enables collaboration and sharing of documents for various business processes. VDRs are particularly beneficial for M&A due diligence and financing, legal proceedings and other projects that require the disclosure of privileged information to third parties beyond the firewall of the company.
Some traditional VDR providers require users to download and run the software on their desktops or use plugins for security reasons. This can slow the review process, hinder access to the VDR and prevent some prospective partners or buyers from taking part in any way. A modern VDR provides a seamless user experience, with native browser support to provide the most robust and flexible solution.
In addition to offering a highly organized archive of files, many VDRs have search capabilities which can find text in most file types including PDF and Excel documents. This is particularly important for M&A due-diligence and fundraising, because it lets administrators understand how much interest documents generated by investors or bidders.
Additionally, many VDRs offer folder level security and user permission settings to ensure that only those who require to view a specific document can access it. This feature is typically used by private equity and venture capital companies to share reports with portfolio companies, limited partners and investors to protect confidentiality and speed up the review process. Pharmaceutical and biotech firms utilize VDRs to speedily share intellectual property and the results of clinical trials with research partners as well as regulatory agencies.