In the past, businesses kept sensitive documents in a locked and key because they were afraid that their sensitive files might fall into the improper hands. If this happened this could result in the loss of business opportunities, costly lawsuits, or even data breaches and fines.

Virtual data rooms (VDRs) are cloud-based software solutions which allow secure remote access for 24 hours a day to folders and files via any device that has an internet connection. VDRs are cloud-based software options that enable secure, 24/7 remote access to folders and files through any device with an internet connection. These platforms provide a range of collaboration tools that can facilitate dealmaking and management of documents. They also include advanced features such as watermarking, granular permissions, and audit trails to limit the chance of accidental or malicious deletion.

Due diligence is one of the most frequent application of virtual data rooms during mergers and acquisitions. It is crucial to have a platform that permits both the sell-side as as the buy-side to quickly review and store documents. VDRs streamline the due diligence process drastically reducing time-to-review.

Startups frequently use VDRs to collaborate with advisors and investors during fundraising rounds, M&A, and other transactions. They allow startups to upload and organize their documents into an intuitive system which accelerates the due diligence process. They also have collaboration tools such as comments, Q&A sections, and tasks to ensure that visit the website teams are organized and work more efficiently. Cloud-based models are offered by a number of modern vendors that do not require any hardware or installation. Other alternatives include self-hosted software running on the startup’s servers, which allows more control but does require IT resources.