When dealing with large quantities of sensitive files due diligence is crucial for all stakeholders. Due diligence files are usually kept in cabinets that can only be accessed by people with physical access. This method isn’t scalable when dealing with larger amounts of data or multiple transactions. A virtual data room (VDR) allows many interested parties to view and comment on sensitive documents without creating copies that could expose confidential information. A VDR is used for due diligence in M&A transactions, litigations, and bankruptcy.
To ease the due diligence process to make due diligence easier, it is essential that a VDR has a structure that is easy to navigate and organizes files based on their type or stage of the project. The structure of the folder can be modified to meet the requirements of various projects and industries. The program comes with an initial index of files that reflect an due diligence checklist. This makes it easier for users to locate the documents they need faster.
The VDR should include all the security features that are required to ensure that no one can access confidential data without permission. This includes the 256-bit encryption, remote shredding, dynamic watermarks restricted viewing mode and secure spreadsheet view, thorough report of activity and antivirus protection. It should also allow you limit the possibility of downloading and print documents as well as limit the amount of time users spend on a screen or document. Different providers provide different security features, so make sure you know how they will accommodate your requirements for data room due diligence before selecting a provider.
