A virtual data room (VDR) is a secure platform for sharing sensitive documents with granular security and customizable access rights. A VDR is more sophisticated than the rudimentary storage options, which typically only allow viewing and downloading. It also permits simple collaboration between multiple parties, and allows for the customization of access privileges.
Due diligence can be a lengthy process that requires many parties to scrutinize a huge amount of information. This can result in long, drawn-out deals or even end the deal when the documentation isn’t comprehensive and properly prepared. A VDR can provide a central location for all relevant information to be shared and viewed by multiple parties, which helps eliminate delays due to miscommunication or a lack of documentation.
VDRs are useful for many other business needs as well in the preparation of portfolio companies for an IPO or fundraising, which requires the organization to share confidential financial information with third parties. They are extremely useful for investors because they can arrange documents into logical subfolders to facilitate navigation, and grant access rights with a single click.
A virtual data room is a great method to share confidential intellectual property in the life sciences industry with potential investors and partners. A VDR’s detailed tracking of document activities allows users to know who has viewed which documents and how long. This data is helpful for making sure that a project has been sufficiently explored, generating curiosity among investors looking to invest and keeping out the possibility of divulging confidential information to the wrong individuals.