The Role of Virtual Data Rooms
29 February 2024 - 00:00 WIB
A virtual data space allows users to view documents from any place with an internet connection. Dealmakers no longer have to spend hours in a physical place looking at piles piles of documents. Instead, they can access the documents remotely, which lowers the cost of due diligence and accelerates the process.
Due diligence in M&A transactions is among the more common uses for VDRs. These transactions require extensive document sharing between the sell- and buy-side of the transaction, and VDRs are the best option to share documents in a safe, controlled environment.
Investment bankers are also a typical group of VDR users. They help their clients with IPOs, capital raising and M&A deals that typically involve large amounts of sharing documents. They are also mindful of the security of confidential information while permitting their clients to access documents.
Life science companies are also a major user group of virtual data rooms. They usually collaborate together with lawyers, accountants and consultants to develop and store sensitive documents. These parties need to have access to the information without compromising privacy or causing a compliance issue.
A modern VDR provides granular permissions that allow the administrator to determine who is able to access what folders and files in the data room. They can also limit access by the number of times that a document has been seen. They can also limit access by the time or IP address to prevent hackers gaining illicit access. Other security features include customized watermarks that can be personalized, encryption in transit and in the rest of the document as well as remote shred.
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