A virtual data room is an online repository for storing and distributing documents that can be organized, shared and tracked at the administrator’s discretion. This makes it ideal to support complicated business processes and projects that require the disclosure of confidential documents to parties outside of the firewall.
The most popular use for online data rooms is in M&A transactions to ease the extensive due diligence process that buyers generally undertake. All relevant documentation being stored in one location allows for a faster and more efficient review, and assists in ensuring the confidentiality of.
Investment banks are the most common users of VDRs, helping on both the sell-side and buy-side in financial transactions such as mergers and acquisitions. They are often required to access and look over large amounts of sensitive data, requiring an efficient storage system and a simple collaboration for many stakeholders across multiple locations and time zones.
Life science companies work in highly-regulated environments with multiple partners and investors and must disclose a lot of sensitive documents regularly. They often have to raise money or prepare for an IPO. VDRs offer a secure environment to share and collaborate, with detailed activity tracking to make it easy to track who has accessed what documents.
The top data room providers offer many features to make document management easier and facilitate collaboration. They offer a more efficient user interface, easy multi-project management with the capability to customize permissions for each user, and a 24/7 support team. They also provide various pricing options, with the majority of them offering an annual subscription plan that offers a lower price per project, as well as the ability to pause and start projects at will.