Sharing documents with investors, clients or partners can be crucial to your business. However, it’s equally important to protect your documents and communications. You’ll need to select a virtual dataroom that has the security features you require access to 24/7 to authorized users Two-factor authentication; timed access expiration; multiple permission levels; and IP address-based access restrictions. Review the certifications of the service provider to make sure they’re compliant with top security standards such as SOC 1, SOC 2, ISO 27001, and HIPAA.
The most common use of VDRs is M&A deals where the buyer has to examine large quantities of confidential documents prior to closing the deal. The traditional method for doing this was to have buyers travel (often via plane) to an area that was secure to look over the hard copies of the documents. This took a long time and increased the risk that the deal would not go through due to delays or other issues.
VDRs allow the confidential documents to be reviewed from any location in the world which makes the process faster and boosts competition among potential buyers. This is especially crucial when dealing with companies in the life sciences sector which must share information on everything from HIPAA compliance and clinical trials to patenting IP licensing and licensing.
Other uses for virtual data rooms include fundraising, IPOs, corporate finance mergers, insolvency and bankruptcy, real estate transactions, litigation and asset sales. It’s easy to see why so many companies switch to VDR providers.