Virtual data rooms (VDRs) make it easier and safer to share important documents with other parties. They are extensively used by companies in a variety of industries such as life sciences and technology for due diligence and other business events, like M&A capital raises, audits, strategic reviews and tenders.

A VDR has several advantages over physical storage. The files can be accessed anywhere that has an internet connection. They are also not subject to physical causes of damage, such as floods or fire and can be stored in a secure way for as long the company would like to keep them.

The most frequent use of VDRs is to VDR is to facilitate an M&A process, where many sensitive documents must be scrutinized by potential buyers. In the course of M&A due diligence, the VDR allows companies to share confidential business plans, financial documents and other documents without having to be concerned about their security. Permissions are able to be changed in a dynamic manner, and the detailed logs of user activities provide valuable insights into the interests of each buyer.

To ensure the safety of online data Virtual data rooms should have multiple layers of security, including physical and cloud security. A reliable VDR will regularly back up its servers in order to prevent data loss due to technical difficulties. It should also employ encryption techniques, digital watermarking and other features to deter hackers from gaining access to files. It should also be easy for teams to move data from different platforms to the VDR and for compliance departments to ensure access rights, or even revoke them as soon as users leave the company.