Due diligence is essential for all stakeholders when dealing with large volumes of sensitive files. The traditional method of storing due diligence files is to keep them in cabinets that are physically accessible so that they can be viewed only by those who have access to those cabinets. This method isn’t suitable for dealing with large amounts of data or multiple transactions. A virtual dataroom (VDR) allows a variety of interested parties to examine sensitive documents and make comments without having copies that could expose confidential information. A VDR is typically used to conduct due diligence in M&A deals, litigations, bankruptcies, fundraising, and audits.
To facilitate the due diligence process, to make due diligence easier, a VDR has a file structure that is simple to navigate and organizes files according to their type or stage of the project. The structure of the folder can be customized to suit the needs of different industries and projects. The program comes with a default index of documents that reflect an due diligence checklist. This helps users find the needed documents faster.
The VDR should be equipped with all the security features needed to ensure that no one can access sensitive data without permission. This includes encryption with 256 bits, remote shredding, dynamic watermarks, restricted viewing mode and secure spreadsheet view, detailed activity tracking and antivirus protection. You should be able to control how users can print and download documents, as well as set time limits for viewing documents. Different providers offer different security features, so make sure you compare their capabilities prior to selecting a provider.