A virtual data room (VDR), sometimes called a virtual deal room, is a secure online repository used for storing and sharing documents with third parties during due diligence, life sciences product development, litigation brief preparation, and other complex business endeavors. While the industries differ in the content of their processes, the VDR meets two essential needs:
- Capacity for large numbers of documents
- A secure environment for documents which contain confidential and proprietary information
Today’s virtual data room is an online replacement for physical data rooms, where hard copies of documents were stored, and the conference rooms where the project team met to collaborate and invite in third party experts. The online VDR eliminates the traditional need for meetings, travel time, and printing.
The online environment also provides a platform in which software tools and features can greatly speed the project’s organization and workflow.
Why Use a Virtual Data Room?
Businesses typically use a virtual data room whenever private, sensitive information needs to be shared among a project team, outside experts, and external customers or partners in a secure and easily accessible environment. For example, virtual data rooms are used in finance, to facilitate the due diligence process during M&A transactions, and for licensing or partnering deals. VDRs are also used across industries for a variety of applications, including:
- Loan Disposition
- Fundraising
- IPOs
- Bankruptcy and Corporate Restructuring
- Private Equity and Venture Capital Transactions
- Investor Communications
- BioPharma Product Development
- Life Sciences Partnering and Licensing
- Research and Development
- Litigation
- Real Estate Transactions
- University Technology Transfers
- Board Collaborations and Reports
- Corporate Repositories
- Audits and Regulatory Reviews
The Advantages of a Virtual Data Room
Streamlining Document Review
A virtual data room from a quality provider can be set up in just a few hours. Once the VDR is organized with folders and files are uploaded, the administrator creates a list of authorized users and issues passwords. Features like bulk uploading and integration with file sharing apps like DropBox, Box, Google Drive, Microsoft SharePoint & OneDrive make the uploading process much easier and more efficient.
For the project team, authorized users have 24/7 access to the VDR, from any registered device, anywhere in the world.
The ShareVault VDR platform has additional features to streamline the document review process:
- Inter-document hyperlinks to move from one document to related content
- “Favorites” tags, to speed a team members return to a reference or in progress document
- Fast Search that shows the keyword in context, with additional filters to search by author, date, and file type
- Q&A, a module where a team member can pose questions and receive replies from designated experts
A virtual data room with these features speeds up the collaboration process for all parties involved and can significantly accelerate meeting the goal of a partnership agreement, financing deal, product development, or meeting a court or regulatory deadline.
Confidence in Security & Document Control
Compared to a physical data room, a VDR is accessible to multiple parties, even in remote locations, any time of day. But access is not carte blanche - the VDR administrator can customize access permissions at the document, folder, or user level. User activities - access to specific documents, the ability to edit, download, print, etc. - is based on an individual’s permissions. The administrator can set an expiration date for when a document is no longer available to a user, and can apply watermarking to downloaded documents. Admin can “virtually shred” a document, even after it’s been downloaded.
To monitor user activity and productivity, a quality VDR provider like ShareVault includes granular user activity reporting. The administrator and team leader can see who has viewed a document, for how long, and what activities the user has engaged in.
For regulatory and compliance purposes, the user activity reports provide a full audit trail of each document’s iterations and viewing history.
Common Virtual Data Room Concerns
For finance due diligence, life science product development, litigation briefs, and other projects, confidentiality is key. In today’s world of hackers and industrial spies, the question is fundamental: is our confidential information truly safe?
The fact is, a virtual data room is much more secure than a physical data room, a USB drive, or an email. The ShareVault VDR provides enterprise-grade security, with more protection than online file sharing platforms like DropBox, SharePoint, OneDrive, and Google Drive, and collaboration platforms like Slack and Asana.
With ShareVault, every document and every user is protected in the VDR environment.
Multi-level Encryption
A sophisticated VDR provider like ShareVault employs multi-level encryption throughout the document lifecycle with AES 256-bit encryption, including encryption in transit (SSL) and persistent encryption with IRM (Information Rights Management). Documents protected with IRM can only be opened with an active VDR connection, so the permission of a user to open a document can be revoked retroactively. In this way, documents can be remotely “shredded,” even after they’ve been downloaded.
Document Permissions and Security Policies
The VDR administrator grants access to a document to specific users and groups. For instance, permission to access a legal document might be granted only to a firm’s corporate counsel, while viewing rights for employee records might be granted only to HR.
The administrator’s security policies also extend to what a user is allowed to do with a document - read only, print, save, copy/paste, take a screenshot. These granular controls ensure that each user has the appropriate permissions. The administrator can modify these rights as the project progresses or can deny continued access.
Dynamic Watermarking
In the course of a project, a user may need to download a document from its VDR folder. Based on the administrator’s security concerns, a “dynamic watermark” can be applied to the downloaded document. The watermark will be clearly visible to remind the user that the document is confidential - yet still allows readability of the underlying text. ShareVault’s watermarking feature also embeds the date and time, user’s IP address and other information.
Secure Printing
In some cases, admin may grant a user the right to print a document to facilitate review and editing, a common practice in finalizing a contract or other document. With ShareVault’s secure printing feature, a user can print to paper but blocks printing (saving) as a PDF, TIFF, or XPS. With secure printing, the team maintains control of documents within the VDR.
How to Choose a Virtual Data Room: A Guide
All virtual data room providers promise secure document sharing. Choosing the best one for a company’s needs means assessing several capabilities:
Security: The highest-quality VDR providers have certifications to prove it. For example, ShareVault security is backed by multiple certifications, including SOC 1/2/3, PCI, ISO 90001 / 27001 / 27017 / 27018, FedRAMP Moderate, DoD CC SRG IL2, HIPAA, and HITRUST.
Advanced Functionality: The best VDR platform has built-in features and software tools that improve the efficiency and speed of a project - the difference between a streamlined process and one that is aggravating and compromises a project’s success. Look for these features:
- Intuitive, Easy to Use Setup and Organization
- Customizable Permissioning for Users
- Unlimited Document Storage
- Smart Document Protections like Dynamic Watermarking & Secure Printing
- Activity Monitoring and Reports
- Happy Customers
Start Today with ShareVault!
As physical data rooms become dinosaurs in today’s digital world, a virtual data room provides a secure online platform that facilitates confidential transactions and other processes that require document security and multi-party collaborations.
A ShareVault representative with experience in your industry can walk you through the process and guide you to the Pricing Plan best suited to your needs.