Virtual Data Room Blog

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In the past, companies kept sensitive documents locked and secured, fearing that their confidential documents could fall into improper hands. This could lead to lost opportunities, costly litigation, or even data breaches.

Virtual data rooms (VDRs) are cloud-based software solutions that provide secure 24/7 remote access to folders and files on any device with an internet connection. VDRs are cloud-based software options that provide secure, 24 hours a day remote access to files and folders from any device that has an internet connection. These platforms provide a variety of collaboration tools to aid in dealmaking and document management. They also provide advanced features like watermarking, granular access, and audit trails that reduce the chance of accidental or malicious deletion.

Due diligence is the most common use of virtual data rooms in mergers and acquisitions. Both sides require extensive documentation to be reviewed and it’s crucial to have a single platform where the documents can be kept and accessed easily. VDRs simplify the due diligence process, significantly reducing timelines.

Startups typically use VDRs to work with investors and advisors during fundraising rounds, M&A, and other transactions. They allow startups to upload and organize their documents in an intuitive system that speeds up the due diligence process. These platforms also come with tools for collaboration, such as commenting, Q&A areas, and task assignment to assist teams in working more efficiently. A majority of modern providers offer a cloud-based model which does not require any hardware or installation. Self-hosted software that is installed on servers that are in use at startup, provides more control, and could require IT resources.

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