Many companies rely on generic tools for file sharing such as Dropbox or Drive to share documents with partners. However these tools aren’t built to support serious business processes that involve the transmission of confidential information. They typically lack features that make it easier to manage sensitive files, such as the ability to customize permission settings and auditing capabilities. These tools also do not make the professional first impression necessary to close a sale or raise funds.
A virtual data room is a safe storage space that can be used to store private documents, typically used during collaboration with partners or business transactions. They are popular with due diligence in M&A and other corporate transactions, in which parties must exchange a large quantity of files. By keeping the documents in a VDR it is possible to have them evaluated and commented upon by all participants at the same time. This speeds up the process and saves money by eliminating the requirement to pay for travel or paper copies of the documents.
Virtual data rooms offer various security features in addition to storing and organizing data. Some of these features were developed to stop unauthorized entry, while others were intended to improve efficiency and communication. Administrators can determine who is able to view what information using a virtual dataroom with advanced permissions. They can also restrict downloading, add a digital watermark, and much more.
The logging feature is a different feature. A VDR provides more comprehensive activity logs than common services for file sharing that provide basic activity logs. This allows for greater understanding of the usage of a document. This is useful in gauging the level of interest shared documents generate with potential investors or buyers and can help guide deal-making.