Businesses have been known to keep confidential documents secured in the fear that they would be accessed by the wrong people. This could lead to loss of opportunities, costly litigation, or even data breaches.

Virtual data rooms (VDRs) are cloud-based software solutions that allow secure remote access, 24 hours a day, to files and folders through any device that has an internet connection. VDRs are cloud-based solutions that provide secure, 24 hours a day remote access to files and folders from any device with an Internet connection. These platforms offer a variety of collaboration tools that can be used for effective dealmaking and efficient document management. They also include advanced features such as watermarking, granular access, and audit trails to reduce the chance of accidental or malicious deletion.

The most frequent use case for virtual data rooms is due diligence during the mergers and acquisitions process. It is crucial to have a platform that allows both the sell-side as as the buyer side to access and store documents. VDRs simplify the process of due diligence drastically reducing time-to-review.

Startups use VDRs to anchor collaborate with investors and advisors in fundraising rounds, M&A and other transactions. These platforms allow startups to upload and organize their documents into an intuitive indexing system that eases searches and speeds the due diligence process. These platforms also come with tools for collaboration, such as commenting, Q&A zones, and task assignment to assist teams in working more efficiently. Cloud-based models are offered by many modern vendors that do not require any hardware or installation. Self-hosted software, installed on servers that are in use at startup, provides more control and may require IT resources.