A virtual dataroom (VDR) is an online repository that can store documents and other files. It can be used to share sensitive business data, for instance, during mergers and acquisitions. Due diligence processes like fundraising rounds, due diligence procedures and financial audits are common. As opposed to traditional physical storage, VDRs provide greater control over access and security while decreasing management costs.

When selecting the best VDR provider, be sure you select one that has a solid and broad set of features that meet the requirements of your company. Take a look at, for instance, whether the platform is in compliance with ISO 27081 standards, has an effective virus and spyware scanner, and offers a 99.9 percent uptime. Multifactor authentication can be used to ensure the data uploaded is secure. You should look for features that allow you to customize the platform like color-coding to help you identify documents in internal meetings, and at-a glance reports that provide C-suite executives with a high-level overview required.

The most commonly used use of the VDR is during M&A deals where buyers are required to review the extensive documentation of the businesses being sold. M&A virtual datarooms allow for an efficient due diligence process and also reduce risk, as they limit access to confidential information to those parties who need to see it. During an M&A transaction users also gain the ability to work effectively through a VDR’s question and answer and comments sections. This improves productivity and speeds up decision-making. Additionally, M&A VDRs enable you to have complete and thorough audit trails, which are essential for M&A due diligence.