A virtual data room is a software that provides secure, central storage for digital documents. It allows users to share data with both external and internal stakeholders. Document version tracking and increased security are also possible.

Investment bankers use VDRs for due diligence in M&A transactions, which usually require large volumes of confidential documentation to be reviewed by multiple parties. If a deal is to be concluded, they must be able upload and review the documents that are confidential quickly. They also need an accessible storage space for this sensitive information. A VDR with an organized folder structure and robust document access controls that can be revoked instantly if the deal fails making it easier for them.

VDRs can also be utilized for audits and regulatory filings which require open communication between internal stakeholders as well as external regulators. These projects often require long collaboration between teams operating in different locations and time zones. A VDR designed for collaboration monitoring activity and communication with all parties involved is easy with a VDR.

When choosing a provider, look for features like drag-and-drop, bulk file upload and support for the most popular file extensions. You should also find out what level of physical security the company can provide with backups offsite, redundancy and fire protection. Find out if they’re offering the ability to add dynamic watermarks on viewed and printed files or to limit access to certain IP addresses.

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