A virtual data room for deal-making is a cloud-based secure repository that permits companies to share and protect important business information over the Internet with clients, investors and company leaders in a secure setting. Other document-sharing services are often called collaboration tools or file-sharing services but they aren’t equipped with the necessary features which make virtual rooms the ideal choice to facilitate transactions and protect sensitive information.

While mergers and acquisitions (M&A) procedures are the most frequent use scenario for the VDR, the software can be used for any type of business transaction that requires secure exchange of sensitive data. This includes financing activities such as raising capital, IPOs, as well as strategic partnerships that involve the transfer of intellectual property and confidential information between different organizations.

When choosing a VDR for contract-making, companies should take into account transparent pricing structures, ease of installation and use, along with an archive centrally located to assist with post-closing requirements, such as audits or regulatory filings to support due diligence. A reliable service also provides an array of document and user engagement metrics including activity reports as well as file view statistics and more.

A VDR can be modified to meet specific needs. This may include adding a logo to the VDR, or creating custom login screens. It could also require granular access controls that prevent the printing or copied beyond specified limits. VDRs should also provide a range of file-level security features, including digital rights management (DRM) properties and watermarking, which could protect sensitive data from accidental dissemination.

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