A virtual data space allows users to look over documents from any location with an internet connection. Dealmakers no longer need to sit for hours in a physical location looking over piles and piles of paperwork. Instead they are able to access the documents from a remote location, which cuts down on the cost of due diligence and speeds up the process.
Due diligence in M&A transactions is one of the most popular uses for VDRs. These transactions require extensive document sharing between the sell- and buying side of the transaction and VDRs are the best option to share documents in a safe and controlled environment.
Investment bankers are also a common group of VDR users. They assist their clients during IPOs, capital raises and M&A transactions that usually require a significant amount of document sharing. They must also be aware of the need to protect confidential information, while allowing clients to access documents.
Virtual data rooms are well-liked by life science companies. They typically collaborate together with accountants, consultants and lawyers to develop and maintain their sensitive documents. These parties must be able to access the data without compromising privacy or causing issues with compliance.
Modern VDRs offer granular permissions that allow the administrator to control who can view which folders and documents within the data room. They can also restrict access according to the number of times that a document been seen. They can also restrict access according to the time of access or IP address to prevent hackers gaining illicit access. Other security features include customizable watermarks, encryption during the process and at rest and remote shred.
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