Virtual data rooms are available in a variety of types that are each designed for the specific needs of a business. Virtual data rooms are most commonly used for M&A due-diligence, but can also be used for fundraising, legal projects and other high-risk business processes that require secure, private document management.
The top VDR software platforms are designed to provide an adaptable, flexible framework for the management of sensitive data. They usually feature an integrated dashboard that has an organization system that is similar to a physical file system. This makes it easy for stakeholders and other parties to categorize documents. This is especially important if there are multiple parties accessing the data room at the same time. It is also essential to provide advanced search capabilities, which allows users to quickly locate the documents they require without having to sort through endless paperwork.
A reliable virtual data room should also include tools for collaboration to facilitate sharing and comments. This allows users to provide feedback on any document, and also share their concerns with other parties directly. Negotiations will continue to progress. Additionally, many quality platforms offer annotation tools that permit users to make notes on documents they are looking at -however, the other party is not able to see these notes.
In terms of VDR types the red data rooms are primarily designed to handle processes that require deep security, while green data rooms balance security with access to a wider range of access. The former more information is typically used in M&A due diligence, whereas the latter is a common tool for legal services and healthcare as well as the real estate industries.