A virtual dataroom (VDR) provides a secure platform to share sensitive documents. It offers high-level security with access permissions that can be customized. Compared to rudimentary storage solutions for data that typically offer only viewing and downloading, a VDR can also provide search functionality and easy collaboration between several parties, and the capability to alter access rights for each user.
During M&A deals due diligence can require a lot of information that must be reviewed by many different parties. It can cause long and drawn-out deals or even the demise of the deal when the documentation isn’t complete and prepared properly. A VDR can provide a central location for all relevant information to be reviewed and shared by multiple parties, which helps official source eliminate delays caused by miscommunication or lack of documentation.
VDRs are beneficial for many other business needs as well, such as preparing portfolio companies for an IPO or fundraising which requires the business to share confidential financial documents with third party. The ability to arrange documents into logical folders that facilitate navigation and grant access rights with a single click makes these tools extremely practical for investors.
For the life science industry, virtual data rooms are the perfect solution for sharing confidential intellectual property with potential partners and investors. A VDR’s detailed tracking of document activities allows users to track who has viewed what documents and for how long. This information can be useful in determining whether a plan is adequately explored and is attracting interest from potential investors. It could also assist in avoiding divulging confidential information to wrong people.