Virtual data rooms are secure storage facilities which allow users to look over confidential documents in a controlled setting during due diligence or other business transactions. It offers a high-level of security protocols, that are not accessible on common file-sharing platforms. They include granular permissions for users, encryption in transit and in rest as well as two-factor authentication, watermarking content and audit trails that record logins uploads, downloads, and logins. These features minimize the risk of data room software safety intellectual theft and unauthorised access to sensitive financial or corporate data, which could compromise deals and lead to lawsuits.
A virtual data room is frequently used to share IP documents with external parties, like potential licensing partners and buyers, during M&A due-diligence. The ability to scale virtual data rooms allows them to share large or confidential documents with internal teams and the stakeholders. Additionally, they allow collaboration with auditors, outside counsel or consultants.
A virtual data room could be used to speed up the due diligence process for other participants in bankruptcy or restructuring. These transactions require a review of the past financial performance of the company including its debt, financial reports and budgets for capital expenditures as well as legal contracts, liens, and customer credit reports. In order to protect the integrity of a transaction and prevent unauthorized access, secure data room security is essential.
