A virtual data room (VDR) is a secure cloud-based repository that facilitates online document sharing and collaboration for business transactions. These transactions can be complicated and often require precise document storage and management to ensure transparency to potential investors or regulatory agencies. A VDR could be an essential device for companies that are planning an IPO as it will help streamline the process by providing a central location for the organization and collection of documents, as well as the capability to share the documents with interested parties.
A reliable VDR software solution should provide different levels of security protocols including a robust permission matrix that includes two-factor authentication, encryption technology, document watermarking that is user-based tools, audit logs and more. A VDR should allow administrators to track who has visited the document and when. This is essential for due diligence teams in order to detect security risks that could be present.
The top VDRs will also provide users with the ability to create custom dashboards as well as templates for reports to let them customize their experience while viewing and access important data points at a glance. This can help companies streamline their workflow and save time. Drag-and-drop features should be in place to enable users to upload large amounts of data as well as single files simultaneously with the VDR.
Finally, the best VDRs will have a backup server in place to ensure they are running even when their primary servers go down. This is an important characteristic to look for, since it will help prevent any downtime that occurs in the middle of a transaction.