Virtual data rooms aren’t limited to a specific industry. Virtual data rooms are used when a business has to communicate confidential documents to outside parties. It could be a merger, an acquisition or IPO or any other type of business transaction that involves the exchange sensitive documents. In some cases it is necessary to provide this information to satisfy regulatory requirements like when a company has to grant access to auditors and regulators to look over the company’s records.
Many companies opt for virtual data rooms to speed up the due diligence process in M&A deals. Due diligence may involve a large amount of documentation which needs to be reviewed by a wide range of parties. The ability to quickly view and download the documents in a VDR helps the process accelerate and cost efficiently.
Other companies use VDRs to facilitate document sharing to facilitate regulatory purposes or for litigation with clients, legal teams and third parties. For example an attorney may need to access the client’s records and must do so in a secure environment to keep from violating privacy laws.
A VDR can be used by businesses to automate processes, workflows and approvals. This can cut down on time and effort that would be required to manually complete tasks such as signing an NDA or managing invoice approvals or submitting files to be uploaded into a data room. Additionally a VDR that is equipped with advanced document processing features can search the text in most types of documents, including PDFs as well as Excel documents.