A Virtual Data Room (VDR) is an online www.datarooming.com/private-equity-vs-venture-capital/ software platform that preserves confidential documents for quick and secure distribution across groups, particularly during due diligence on deals. It is generally used during M&A and IPOs, but can also be utilized by law companies, healthcare organizations such as life science companies real estate brokers, investment banks, hedge funds as well as private equity firms and many others.

Virtual Data Rooms offer multi-level security that allows administrators control access to folders. Administrators can grant privileges to users depending on their role and track who has seen the document, and for how long. This level of detail can be vital for businesses who require proof of compliance.

A reliable Virtual Data Room should also feature advanced search capabilities as well as document processing capabilities that can scan and convert typed, handwritten or printed documents and also text saved in an image into digitally readable formats. This lets users easily find information and provides users with a more thorough audit trail that can be used for compliance purposes.

Many companies believe that all VDRs have the same features. However, it is important to evaluate their needs and choose a provider who can provide the solution that best meets their needs. To do this, they should consider the number and types of users as well as the length and size of their project, and storage requirements before committing to a solution. It is also important to review the pricing structure of the service provider to make sure that it can manage every type of project and use case at a reasonable cost.