A virtual data room is an instrument which facilitates document sharing in any situation that requires secure and professional administration and distribution of files. Most commonly, VDRs are used in mergers and acquisitions however they are also beneficial for strategic partnerships, raising funds, IPOs as well as legal proceedings.

In the past it was normal for people involved in due diligence or legal procedures to travel to a physical place and spend hours looking through stacks of papers. Virtual data rooms remove this inconvenience, and provide an environment that is more user-friendly for all parties. With the help of an advanced search engines, you can locate a document with just a few clicks.

Another major function of the virtual data room is its ability to aid in complex communication and collaboration in the context of negotiations. A leading pharmaceutical firm, for instance, utilized a virtual dataroom in the course of a complex merger between an industry giant and a renowned pharmaceutical firm. Because of the streamlined process for communication and enhanced data security offered by the platform, both companies were able complete their merger with little changes.

A virtual data room may also provide more detailed analysis, which is focused on transactions unlike cloud storage apps. For instance while cloud storage applications offer basic access statistics like usage statistics and current access, VDRs allow admins to give more granular access rights to specific documents or folders as well as track the activity of users at an extremely fine level, including who has access to which document and for the length of time. In addition, VDRs can be set to limit the frequency at which an individual logs on to the system, the duration that they are able to access the platform, and even restrict access based on IP address.