Virtual data rooms (VDRs) help make it easier and more secure to share important documents with third parties. They are used extensively by businesses in various industries, including life sciences and technology for due diligence and other business-related events like M&A, capital raises, audits, strategic reviews and tenders.

A VDR offers a number of advantages over physical storage. The files can be accessed from any location that has an internet connection. They are also not susceptible to physical damages, such as floods or fires and can be kept in a secure way for as long the business wants them to be.

A VDR is used primarily to facilitate M&A processes, where numerous sensitive documents must be reviewed by prospective buyers. In the course of M&A due diligence it is important to have a VDR allows companies to share confidential financial documents, business plans and more without having to worry about their security. Permissions can be modified dynamically, and detailed records of user activity provide valuable insight into the interests each buyer.

A virtual data room must have multiple layers of security, including physical security and cloud security, to ensure the safety of data online. A reliable VDR will regularly backup its servers in order to prevent data loss in the event of technical issues. It should also utilize encryption techniques, digital watermarking and other security features to prevent hackers from gaining unauthorised access to files. It should also be simple for teams to transfer files from different platforms to the VDR, and for compliance departments to ensure access rights or terminate them as soon as users leave the company.