A virtual dataroom (VDR) is an electronic repository that allows for the safe sharing of sensitive documents during business transactions. It is commonly used in the M&A (mergers and acquisitions) process, but it’s also useful in sharing confidential documentation with investors, partners or other stakeholders during due diligence.
The most reliable VDR software provides a variety of features that are designed to increase security and efficiency. It should provide secure uploading, search and filtering of documents, redaction, archiving and other features for data security and retention. It should also offer multi-language support, a range of access rights and user-friendly training materials. DFIN Venue is a good example, as it integrates digital tools into one platform, and employs AI to automatize and streamline the process of reviewing contracts.
Other important characteristics of a VDR are tracking and auditing capabilities, which allow administrators to track who has done what with documents. This is an extremely important characteristic, particularly for companies that are involved in M&A or due diligence processes. The ability to obtain reports at any moment helps to keep everything in order and reduces the possibility of sensitive information being mishandled or lost.
The most common use case for the use of a VDR is when a company needs to share private documentation with other parties involved in the course of a transaction. This is much more simple and faster with a VDR rather than physically meeting with the buyer face-to-face.
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