A virtual data room (VDR) is an encrypted repository to share documents and other information. It is a popular tool in M&A transactions, due diligence, fundraising, and other high-stakes business activities that require the exchange of confidential information among the parties.
In the past, physical data rooms were used for this purpose. They were secured in a central location that was monitored and required a security team to control access. These rooms are expensive to maintain and are lacking many features, making them a poor solution for modern companies.
Digital VDRs offer a central repository that can be accessible by authorized users on request. They also include a variety of security features that are industry-standard like encryption two-factor verification, watermarking and audit logs. You can rest assured that your data will not be compromised by malicious activities.
When choosing a VDR it is important to look at their track record and experience of delivering online document-management solutions for sensitive information. Also, you should consider how they comply with different industry standards of compliance. For instance, HIPAA-certified companies ensure that health information protected by HIPAA is stored securely, while those certified under GDPR and CCPA can help companies comply with European privacy laws and California consumer protection laws.
A variety of tools, including Google Drive, Dropbox, and Email are helpful for everyday file sharing, however they’re not the ideal option for storing and sharing sensitive information that requires a strict degree of privacy. Using a reputable, reliable data room can simplify M&A transactions as well as due diligence processes and other high-stakes business projects while keeping your sensitive information safe and organized.