Virtual data rooms are not restricted to one specific industry. Virtual data rooms can be used by companies to share sensitive documents. This could be as a result of a merger, acquisition or IPO or any other kind of business transaction that requires the exchange of sensitive documents. In some cases the information required is for regulatory reasons, such as when a company has to give access to auditors and regulators for a review of the company’s documents.
Virtual data rooms are utilized by a variety of firms to simplify due diligence in M&A transactions. The due diligence process can comprise a large amount of documentation that needs to be viewed by a variety of interested parties. Being able to access digital storage for business portfolio diversification strategies and download documents in a VDR allows the process to proceed faster and more cost effectively.
Other businesses use a VDR to facilitate sharing of documents with clients, legal teams, and third-party partners for regulatory reasons or litigation. For example lawyers may require access to the records of a client and must do this in a secure environment to keep from violating privacy laws.
A VDR allows businesses to automate processes, workflows, and approvals. This will reduce the time and effort needed to manually perform tasks like signing an NDA, managing invoice approvals, or submitting files for upload into a data room. A VDR equipped with advanced document processing capabilities will be able to search the text of all kinds of files, including PDFs and Excel files.
