A secure dataroom for business (also known as a virtual deal room, VDR, or electronic dataroom) is a secure online space for sharing and uploading sensitive documents and files. It lets users upload and discuss important business documents with investors, clients or company executives on the internet in a secure environment. It is commonly used for due diligence and compliance litigation as well as corporate transactions and fund raising.
A data room’s primary security feature is to block any unauthorized access to sensitive information. To achieve this, it employs access controls to only allow those with the right to access protected documents. It also comes with features to track who has viewed what and when. Many systems provide encryption of data at rest to ensure that hackers are not able to access servers to gain entry or access documents if they don’t have the right keys.
Some systems also allow downloading of documents to be viewed offline. This improves the user experience however it also compromises security as PDF files can be easily hacked using screen grabber tools. They may only offer limited protection such as watermarks that can be easily removed.
A secure data room, when utilized correctly, can facilitate faster due diligence as well as speed up the selling process by allowing multiple stakeholders to work on projects at the same time. It will also increase the competition among buyers by making sure that the most exact and complete set of documents are accessible for review. It will also save the business that is being bought money by removing the need to pay for storage and space.