Virtual data rooms can be used in a variety situations to facilitate secure document sharing without the requirement for a costly physical facility. VDRs are most commonly utilized during due diligence for mergers and acquisitions. However, they can be used to share documents between business partners, customers and other stakeholders.
A virtual data room is ideal for M&A transactions as it allows the sell-side and potential buyers to view documents from one location without having to divulge sensitive information. Additionally, investment bankers typically utilize VDRs to share confidential documentation with clients and other stakeholders in M&A and capital raising processes. Technology companies use VDRs to share design plans and manufacturing information with teams located across the globe. Consultants make use of them to discern trends from big data sets that can help inform corporate strategy.
A VDR can also help reduce M&A costs by eliminating the need for printing and travel, and by giving access to documents quicker than could be the case using a physical repository. It is also simple to tailor the storage system to suit each project, and give restricted access on a document-by document basis.
VDRs are usually accessed through an internet browser, which means users can browse documents whenever they have internet access. Administrators can get detailed reports of user activities including who viewed which documents when, and from where. This provides information that is not possible with physical storage. Access logs only provide information about who accessed what and when.