https://proportionaltax.com/2020/11/07/five-tips-for-evaluating-your-online-data-room/
A virtual data room (VDR) is an encrypted platform for sharing sensitive documents with granular security and customizable access rights. A VDR is more advanced than the rudimentary storage options, which typically only allow viewing and downloading. It also allows ease of collaboration between various parties and allows for customization of access privileges.
During M&A deals due diligence may require a lot of data to be reviewed by many different parties. This can lead to long and drawn-out deals, or make the deal unworkable in the event that the documentation isn’t completed and properly prepared. A VDR offers a central repository for all the relevant data to be shared and viewed by several parties, thereby eliminating delays caused by miscommunication or lack of documentation.
VDRs can be utilized for a variety of other business needs, such as preparing portfolio companies for public listing or for fundraising, in which the company must share confidential financial documents with other parties. The ability to arrange documents into logical folders to facilitate navigation and to grant access rights in a single click makes these tools extremely beneficial for investors.
A virtual data room can be a wonderful way to share confidential intellectual property within the life sciences industry with potential investors and partners. With the ability to track document activity in granular detail, a VDR allows users to track exactly who has viewed which documents and for the length of time. This information can be helpful for assessing whether a project is sufficiently researched and generating interest among potential investors. It can also assist in avoiding divulging confidential information to wrong people.