In a virtual data room, confidential documents is exchanged during due diligence and strategic transactions. The specialized platform can make the entire process simple and efficient, removing concerns about the security of sensitive information. Contrary to free file sharing software dedicated virtual rooms provide customized permission settings, sophisticated auditory capabilities as well as watermarking. They can also be used to conduct forensic security analysis of a shared document to assess its potential for leaks.

If a company is looking at an M&A deal or sale of assets, it will likely need to share sensitive information with multiple parties. This can be accomplished with an online repository secure and secure that provides remote access to authorized users, including advisors from outside and investors. VDRs can be used to transfer any type of document, from presentations to spreadsheets and images to CAD files. They have pre-defined folder templates to help with due diligence checklists, as well as drag-and drop upload abilities that simplify the organization of complicated folder structures. Advanced VDRs also offer automatic index numbering, dynamic watermarking, and many other features that improve document security.

A VDR is useful in many scenarios including selling assets to making strategic partnerships with other companies. Startups and companies seeking to raise funds will need to disclose a large amount of information to attract potential investors, therefore they rely on VDRs for due diligence. A VDR can help to accelerate the entire fundraising process and reduce disclosure time by allowing a company to securely exchange information with potential investors, auditors, and lawyers.