A online data room is a secure online space for uploading and sharing files. They are usually used to share private documentation with other parties during M&A transactions, due diligence, or as part of an obligation to comply with regulatory requirements.

It is important to think about the ease of use when selecting the provider that will provide an online data room. Many VDRs, for example offer templates for folders to make due diligence easier and faster by allowing users to use a pre-designed structure. In addition, many providers provide drag-and-drop upload capabilities which eliminate the need to create complex folder structures manually.

The ability of VDRs to create custom workflows for each project is a further advantage. Some providers permit users to add branding and NDAs to their platform, whereas other providers permit administrators to set granular access rights for each document. Additionally certain providers offer different notification settings that can be configured for different events in the virtual data room.

VDRs can also help companies save money by not having to cover buyers' travel costs during the due diligence process. They can also stop the loss sensitive information that would be the case if a person carried physical copies of the data. They can also be accessed and updated simultaneously by multiple users. This makes them an excellent tool for M&A transactions, IPOs and other regulatory compliance requirements.