A virtual dataroom (VDR) is an electronic repository that allows for the secure sharing of sensitive documents during business transactions. It is typically used for M&A (mergers & acquisitions) however, it could also be beneficial to share confidential documents with investors, partners or other stakeholders during due diligence procedures.
The best VDR software offers a variety of features to ensure security and efficiency. It should offer features like secure uploading documents, document search and filtering, redaction and archiving, and other features that protect the privacy of your data and to ensure its retention. It should also provide multi-language support and various access rights, aswell with user-friendly training materials. A good example is DFIN Venue, which integrates multiple digital tools onto a single platform and has AI functions that streamline and automate contract review.
Other important features of the VDR include auditing and tracking capabilities, which allow administrators to determine who has made what changes to documents. This is an essential feature, particularly for companies who are involved in M&A or due diligence processes. The ability to obtain the report at any moment helps keep everything in order and decreases the chance of sensitive information being lost or mishandled.
A VDR is typically used when a company wants to share confidential documents with other parties involved in an transaction. It is faster and easier to do this via the use of a VDR than traveling to meet face-to-face with the buyer, which may be inconvenient for both parties.