A virtual data room (VDR) is a secure platform for sharing sensitive documents with granular security and customizable access permissions. When compared to rudimentary data storage solutions that typically offer only viewing and downloading but a VDR can also offer search functionality as well as easy collaboration between multiple parties, and the capability to set access privileges for every user.
Due diligence can be a long procedure, requiring multiple parties to go through a large amount of information. This can result in lengthy and drawn out deals, or even the death of the deal if the documentation is not fully and correctly prepared. A VDR lets all relevant information to be shared, viewed and accessed by multiple parties in one central location. This can reduce delays due to miscommunications or a lack of documentation.
VDRs can be utilized for a variety of other business purposes, including preparing portfolio companies to go public or for fundraising, in which the company must share confidential financial documents with other parties. The ability to organize documents into logical folders to facilitate navigation and grant access rights in a single click makes these softwares extremely beneficial for investors.
For the life science industry, virtual data rooms are the perfect solution to share confidential intellectual property with investors and potential partners. A VDR’s detailed tracking of document activities allows users to determine who has viewed which documents and how long. This information can be useful in making sure that a project has been sufficiently explored, generating interest from potential investors and avoid the risk of divulging confidential information to the wrong individuals.
