A virtual data room (VDR) is a secure, digital storage space for sharing sensitive information during business deals. It is used for M&A (mergers & acquisitions) however it can also be beneficial to provide confidential documents to investors, partners or other stakeholders during due diligence.

The most effective VDR data online software has a wide range of features that are designed to improve security and efficiency. It should include features like secure uploading, document search and filtering as well as redaction and archiving as well as other features to safeguard the privacy of your data and to ensure its retention. It should also offer support for multiple languages and a variety of access permissions, as well in user-friendly training materials. A good example is DFIN Venue, which integrates multiple digital tools into one platform, and also has AI functions to simplify and automate contract review.

VDRs also include important features like tracking and auditing, which allows administrators to monitor who has accessed documents. This is an important feature particularly for companies that are frequently involved in M&A activities or in due diligence processes. The ability to access an update at any time helps to keep everything organized and reduces the possibility of sensitive information being lost or mishandled.

A VDR is typically used when a company wants to communicate confidential documents to other participants in an transaction. It’s much faster and easier to do this with the use of a VDR rather than physically traveling to meet with the buyer, which is uncomfortable for both parties.