5 Reasons Why A Virtual Data Room is More Effective than Other Online Platforms

With that in mind, there are several reasons to prioritize a virtual data room over your average filesharing suite. This also means that a virtual data room could offer greater transactional control than Google Drive or Dropbox. If you’re wondering why VDRs are a better option than other online platforms, here’s what you need to know.

1. VDRs give you greater access controls

While certain filesharing platforms enable you to set and edit file access permissions, these aren’t always the most robust options. For example, during fundraising, due diligence, or another financial transaction, you must be able to set specific, tailored permissions for each new user within the VDR system. This means that you can limit which accounts can and can’t access sensitive documents, financial statements, or other confidential information. Compared to other online platforms, a secure virtual data room makes it much easier to implement these account restrictions and change them as M&A needs dictate.

2. Virtual data rooms provide richer deal histories

In many cases, it’s important to review past M&A data, review, adjust, and remove sensitive data as time and business scenarios dictate. Whether you’re reviewing previous intellectual property uploads or you’re reviewing an old private equity data folder, there are plenty of reasons why you might want to better archive, store, and adjust your data throughout the years. While virtual data rooms can empower you during the due diligence process, they offer greater storage options than physical data rooms and smarter archival tools than other online platforms.

3. VDRs enable you to review user activity

While many online platforms offer a rudimentary offshoot of this function, a virtual data room solution makes it much easier to see specific user activity. This can then help you make more effective deal decisions. For example, the right virtual data room provider enables you to review who interacts with secure documents, confidential data, and financial statements. You can also see when VDR users employ their passwords to log in and complete two-factor authentication. This ease of use helps you spot when people enter the virtual data room or firmroom. It also helps you spot when an M&A transaction has sat for a while and requires attention.

4. Virtual data rooms offer Q&A functions

The Q&A function is critical for any effective workspace. However, outside of secure data rooms, few brands leverage the right tools and collaborative features. When you’re working with investment banks, buyers, bidders, vendors, sellers, and other interested parties during an M&A deal, it’s important to have full control and enable users to ask questions, make comments on key documents or litigation, and empowering partnerships. This helps streamline this key business process and allows easier communication.

5. VDRs help with digital rights management

Standard cloud security might seem like a cost-effective option, but it’s not as beneficial when you’re dealing with sensitive information and document security. After all, if your digital products fall into the wrong hands, you can lose control of confidential files and information. Further, especially where rights management and large files are concerned, most cloud storage platforms can’t compete with VDRs, particularly during the M&A process.

VDRs offer a complete due diligence solution that can empower project managers, legal firms, investment banks, and other users. From a solid audit log to document activity reports, the right VDR collaboration platform can give you a secure file solution.