Virtual data rooms function as a secure storage space to store and distribute confidential documents during transactions. All VDR providers provide the same basic capabilities however, certain providers specialize in specific industries or transactions. In addition, they often provide a variety of additional functions to make their software more efficient and user-friendly.
VDRs also facilitate the process of raising funds by making financial information about a business available prospective investors on a view-only basis, which improves the probability that a new venture will be successful. They are particularly helpful for due diligence where every detail about a business is required to be scrutinized.
When choosing a VDR, M&A teams should consider the amount of storage they will require and how much data each person will be able to access via the digital workspace. They should also look into a VDR’s permission settings, for example, the ability to restrict the access to files to “view only” as well as specific user roles.
Other features to be looking for include drag-and-drop uploading, automatic indexing and document numbering as well as an optical character identification tool that allows full-text searches on all uploaded files, dynamic watermarks that appear on every file when viewed, printed or downloaded, as well as the ability to add custom brand colors. Some VDRs ask that users sign a nondisclosure contract before downloading any data. This adds an extra layer of security.
The most secure VDR firms have multiple security certifications like ISO 27001, SOC 1/2/3 GDPR, and HIPAA. They should also allow users to alter their security levels and even create fencing views that block sections of documents to stop screenshots. They should also provide support via live chat, email and phone.