A virtual dataroom (VDR) is an electronic repository that allows the secure sharing of sensitive documents during business transactions. It is often used for M&A (mergers & acquisitions) however, it could also be useful to share confidential documents with investors, partners as well as other parties during a due diligence procedure.
The most reliable VDR software offers a variety of features designed to improve security and efficiency. It should include features such as secure uploading document search and filtering, redaction and archiving, and other features to ensure the privacy of data and ensure retention. It should also provide multi-language support as well as a range of access permissions, and user-friendly training materials. DFIN Venue is a good example of this, as it integrates digital tools into one platform, and employs AI to simplify and automate the process of reviewing contracts.
Other significant characteristics of the VDR are the auditing and tracking capabilities that allow administrators to track who has made what changes to documents. This is an essential function particularly for companies who are often involved in M&A activities or in due diligence processes. The ability to obtain a report at any given time allows you to keep everything organized, and reduces the risk of sensitive information being mishandled or missing.
A VDR is usually used when a company wants to share confidential documents with other parties involved in the transaction. It is quicker and easier to accomplish this through the use of a VDR rather than physically traveling to meet with the buyer, which could be uninspiring for both parties.