Online storage tools are often used by businesses to share confidential data with third-party organizations. These tools do not have important features, such as the ability to audit and set permissions which are essential during M&A, capital raisings, and strategic reviews. In these cases the virtual room is the best solution.

Investment bankers are one of the most common users of virtual data rooms. They aid both digital rooms in advisory services the sell and buy side of M&As by preparing and reviewing documentation. A VDR is the perfect platform to handle large amounts of data.

Life science companies are an additional industry that regularly uses the virtual data room to provide sensitive information to investors and partners. This information can include clinical trials, HIPAA compliance and licensing IP. Startups can also utilize a VDR for analysis of interest and to determine which prospective investors are most likely to be spending time reading documents.

A VDR can also be utilized for due diligence purposes during a merger or acquisition. It helps both the sell and the buy side review the necessary documentation in a secure setting, and also allows them to inquire about and give feedback on-demand. This reduces the possibility of confusion and miscommunication and ultimately helps close deals more quickly.

While there are many different ways to share and store data online virtual data rooms provide a secure and highly-scalable solution that can be used for a variety of commercial uses. When choosing a service provider be sure to consider customer support, security and pricing strategies.