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A virtual dataroom (VDR) offers an encrypted platform for document sharing and collaboration in various business processes. VDRs are particularly useful in M&A due diligence and financing, legal proceedings and other important projects that require disclosure of confidential information to outside parties that are not within the firewall of the company.

Some traditional VDR providers ask users to download and run desktop software or plugins for security reasons. This can slow down the review process, restrict access to the VDR and prevent some prospective customers or partners from taking part in any way. Modern VDR offers a more seamless user experience with native browser support for an enhanced and flexible solution.

In addition to offering a highly organized repository of documents, many VDRs have search capabilities that are able to detect text within all file types, including PDF and Excel documents. This is particularly important for M&A due-diligence and fundraising, because it lets administrators know the amount of interest documents generated by bidders or investors.

Many VDRs also allow users to have permissions on their folders to ensure that only users with the need to view documents can access them. This feature is typically used by private equity and venture capital companies to share reports with limited partners, portfolio companies and investors to protect confidentiality and speed up the review process. Pharmaceutical and biotech companies utilize VDRs in addition to communicate intellectual property and the results of clinical trials with research partners and regulatory agencies.

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