A virtual dataroom (VDR) provides an encrypted platform for sharing sensitive documents. It provides high-security with customizable access rights. As opposed to the basic storage solutions for data that typically provide only viewing and downloading, the VDR can also offer search functionality, easy collaboration between multiple parties, and the ability to customize access privileges for each user.
Due diligence can be a lengthy procedure, requiring multiple parties to go through a large amount of information. It can cause long and drawn-out deals or even the death of the deal if the documentation is not complete and prepared properly. A VDR lets all relevant information to be shared, reviewed and access by multiple parties in one central location. This reduces the time it takes caused by miscommunications or the absence of documentation.
VDRs are beneficial for many other business needs as well in the preparation of portfolio companies for an IPO or fundraising which requires the business to share confidential financial documents with third-party investors. The ability to organize documents into logical folders that facilitate navigation and also grant access rights at a single click makes these tools useful for investors.
For the life science industry, the virtual data room is the perfect solution for sharing confidential intellectual property with investors and potential partners. A VDR’s comprehensive tracking of document activity allows users to identify who has visited what documents and for how long. This information can be helpful to determine if a project is being sufficiently explored and inciting interest among potential investors, and can help avoid the the importance of cash flow analysis risk of divulging proprietary information to wrong people.