Virtual data rooms are not limited to a specific industry. Virtual data rooms can be used by companies to share sensitive documents. This could be the case with a merger, acquisition, IPO, or any other business transaction that requires the exchange of sensitive information. In some instances, this information is required for regulatory reasons for instance, when a business needs to give access to regulators and auditors to review the company’s documents.
Virtual data rooms are used by a variety of firms to simplify due diligence in M&A transactions. The due diligence process may involve a massive amount of documentation that must be viewed by several interested parties. Being able to easily access and download documents in a VDR makes the process proceed faster and more cost effectively.
Other companies 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 need to access the client’s records and must do so in a secure location to ensure that it is not in violation of privacy laws.
A VDR can also allow businesses to automate their in-process workflows, processes and approvals. This can cut down on the amount of time and effort needed to do manual tasks for instance, signing an NDA or managing invoices’ approvals, or transferring files into the dataroom. A VDR with advanced document processing capabilities will also be able to search for text of a variety of types of files, such as PDFs as well as Excel files.