Sharing documents with investors, clients or partners is essential to your business. It’s also essential to protect your documents and communications. You’ll want to choose an online dataroom for your business that has the security features you need 24/7 access for authorized users and two-factor authentication, timed access expiration and multiple permission levels; and IP-address-based access restrictions. Review the provider’s compliance certificates to ensure they are in line with the top security standards, such as SOC 1 and SOC 2, ISO 27001 and HIPAA.
VDRs are commonly used in M&A transactions in which buyers must review large volumes of confidential documents prior to closing a deal. The traditional method for doing this was to have buyers travel (often by plane) to an unsecure location to review the hard copies of the documents. The process took several days and increased the chances that the deal would fall through because of delays and other issues.
VDRs enable confidential documents to be reviewed from any part of the world which helps speed up the process and boosts competition among potential buyers. This is especially important when dealing with companies in the life sciences industry that 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 and insolvency, real estate transactions, litigation and asset sales files. With the many possibilities for document sharing, it’s easy to understand why many businesses turn to VDR providers.
