A virtual data room (VDR) is a secure platform for sharing sensitive documents with granular security and customizable access permissions. In contrast to basic storage solutions for data that typically allow only viewing and downloading the files, the VDR can also provide search functionality as well as easy collaboration between multiple parties and the ability to set access privileges for each user.
When it comes to M&A deals due diligence may require a lot of information to be reviewed by various parties. It could lead to lengthy and drawn out deals, or even the demise of the deal when the documentation isn’t fully and correctly prepared. A VDR provides a centralized location for all relevant information to be shared and reviewed by multiple parties, which eliminates delays due to miscommunication or a lack of documentation.
VDRs can be used for a range of business needs, such as preparing portfolio companies for public listing or for fundraising, where the company is required to share confidential financial documents with third parties. They are extremely useful to investors because they arrange documents into logical subfolders that make it easier to navigate and also grant access rights with just a click.
For the life science industry, VDRs are the ideal solution to share confidential intellectual property with investors and potential partners. The VDR’s precise tracking of document activities allows users to identify who has seen what documents and for how long. This data can be useful in determining whether a plan is sufficiently explored and inciting interest among potential investors, and can assist in avoiding divulging confidential information to wrong people.