A virtual data room (VDR) is secure platform on which important documents can be kept throughout the duration of an M&A transaction. These documents could include contracts, employee information and financial statements. This can help to speed up the due diligence process and also protect the privacy of information from the selling company.
Due diligence is the process of research that is conducted by a buyer or potential investor to analyze the potential company and its assets before engaging in a business transaction. Technology has altered this process dramatically over the years, especially when it came to sharing sensitive information. Online VDRs permit businesses to share files online with investors and other stakeholders.
Many online VDRs adhere to strict security standards that include a variety of intricate site web layers that work together to create a total protection against attacks and breaches. Physical security includes continuous backups, data siloing in private cloud servers, multi-factor authentication and accident redemption. Application security is a combination of encryption, digital waterstamping audit trails, and permissions that allow for a customized folder structure.
The ability of a VDR’s to integrate with existing processes and systems is another feature that differentiates it from the rest of the market. This lets users use their favorite tools and software for the job at hand while streamlining the process of M&A transactions. Certain VDR providers also offer more cost-effective plans dependent on the amount data uploaded to the platform, the number of users, the size of storage and the length of the project. This can help companies avoid unexpected charges and overages.