A virtual data room (VDR) is a cloud-based repository for documents and other data files that is used to securely share sensitive information during complicated business transactions like mergers and acquisitions due diligence processes and financial audits, fundraising rounds, and legal proceedings. VDRs provide greater security and control than traditional physical storage, while also reducing costs.

When selecting a VDR provider, make sure you select one that has a solid and extensive set of features to meet the requirements of your business. For instance, you may be interested in determining if the platform is compliant with ISO 27081 standards for data protection or has strong malware and virus scanning and uptime that exceeds 99.9 percent and multifactor authentication to guarantee that uploaded data remains secure. You should look for features that allow you to customize the platform such as color-coding, which can help you identify documents in meetings at a glance reports that provide executives in the C-suite with the comprehensive overview they require.

A VDR is used most often in M&A transactions, where prospective buyers look over a large amount of documents regarding the companies that are being sold. M&A virtual datarooms allow for an efficient due diligence process, and lower risk since they limit access to confidential information only to those parties who need to access it. In Clicking Here an M&A transaction the users also benefit from the ability to collaborate effectively using a VDR’s Q&A and comments sections. This boosts productivity and speeds decision-making. M&A VDRs also provide you with full audit trails that are crucial for M&A diligence.