Virtual data rooms come in a variety of forms, each suited to the specific needs of a business. The most commonly used use case is for M&A due diligence, however they can also be useful for collaborating on legal and fundraising projects, or for any high-stakes business process that requires secure and confidential document handling.
The top VDR software platforms are designed to offer a flexible, scalable framework to manage sensitive data. They usually have a central dashboard that has a structure for folders that is similar to the physical file system, making it easy for stakeholders to organize and categorize documents. This is especially important if there are multiple parties using the data room simultaneously. Advanced search features are vital and allows users to easily find the documents they need without having to sort through a mountain of paperwork.
Another important aspect of a great virtual data room is the collaboration tools that allow sharing and commenting. This allows users to provide feedback on any document and then share their comments with other parties directly. The negotiation process will continue to progress. Most quality platforms also have annotation tools that allow users to record notes on documents they are reading. However the other party won’t have access to these notes.
The red data rooms are utilized for processes that require a high degree of confidentiality, whereas green data rooms provide the perfect balance of security and openness. The former is usually used for M&A due-diligence, whereas the latter is more prevalent in the legal services, healthcare and real estate.