Virtual Data Room Software is an online secure repository that allows the storage and sharing of files and documents that are confidential. This includes financial records as well as documents like intellectual property rights, legal contracts employees’ information, etc. VDRs are typically utilized in the M&A process as part of due diligence, as well as for a variety of other collaborations among business stakeholders like joint venture investments, executive communications between board members, patenting and licensing.
The primary benefit of a VDR is that it is accessible remotely and securely by authorized users using a web browser or special agent applications. The data is secured through specific permissions for each file and advanced encryption methods that protect sensitive information from being accessed in illegal ways, like hacking. The VDR should be highly customizable and fully integrated into the company’s workflows and IT systems.
VDRs can be useful for all types of business transactions, but certain industries use them more heavily than others. Life science and technology companies, which have to protect their proprietary data are some of the most heavy users. However, almost all businesses can benefit from an VDR for certain collaborations.
It’s crucial to choose a VDR that has an intuitive, simple interface that is easily understood by CFOs and entry-level accountants. It’s also an excellent idea to look for a vendor who offers an initial trial for free and allows customization to ensure seamless integration with an organization’s existing technology stack.
