When dealing with large quantities of sensitive data due diligence is essential for all parties. The standard method of managing due diligence files is to store them in physical cabinets so that they can be reviewed only by those with access to the cabinets. This approach doesn’t scale when dealing with larger amounts of data or multiple transactions. A virtual dataroom (VDR) allows multiple interested parties to examine sensitive documents and make comments without the need to make copies that could expose confidential information. A VDR is commonly utilized to conduct due diligence on M&A deals, litigations, bankruptcy, fundraising and audits.
The structure of a VDR’s files is simple to navigate and the files are organized based on the type of project or stage. The structure of the folder can be customized to fit the requirements of specific projects and industries. The program typically comes with an initial file index that matches the due diligence checklist, which can help users find the required files quicker.
The VDR should include all the security features required to ensure that nobody is able to access confidential data without permission. This includes 256 bit encryption, remote shredding (with dynamic watermarks) and restricted viewing mode as well as secure sheet view. detailed activity reports, and antivirus protection. It will also allow you to limit the download and print documents and limit how long users can spend on a screen or document. Different providers offer different security features, so make sure you compare their capabilities prior to selecting the best one.