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A virtual dataroom enables users to access documents from anywhere they connect to the internet. They remove the need for dealmakers to travel to and from piles of documents in a physical setting. They can instead access the documents via the internet. This reduces the costs of due diligence and speeds up the entire process.
M&A due diligence is one of the most popular scenarios for VDRs. VDRs are perfect to share documents between the buy-side as well as the sell-side of these transactions.
Investment bankers are another common user group for VDRs. They assist their clients with IPOs as well as capital raisings and M&A transactions that usually involve a lot of sharing documents. They must also be mindful of the security of confidential information while they allow their clients to access documents.
Virtual data rooms are also well-liked by life science companies. They typically work together with accountants, consultants and lawyers to create and store their sensitive documents. These parties must be able to have access to the data without compromising privacy or creating an issue with respect to compliance.
A modern VDR has granular permissions which permit the administrator to control who is able to access the specific folders and documents within the data room. They can restrict access based on the amount of times a document is viewed, and they can restrict access by time or IP address, to prevent hackers from gaining access. Other security features include customized watermarks that can be personalized, encryption in transit and in the rest of the document as well as remote shred.
