A virtual data room (VDR) is a secure space where like it companies can share data with many users. It is used to conduct due diligence in M&As, fundraising events and other corporate events. The best providers offer intuitive software for collaborative projects that help speed due diligence and conclude deals faster. They also offer a robust security, allowing file sharing, and allowing users to modify access to documents.

The first step to use an online data room is typically the registration of an account. This involves providing personal data and agreeing to the terms of usage and privacy policy. After completing the registration process an administrator will be able to create user groups as well as the ability to grant specific permissions to documents. For example, a company could allow users to browse the files in the data room or download them as PDFs, but only after they have signed a non-disclosure agreement (NDA).

A thorough activity tracking feature is another beneficial feature of an online room. This allows administrators to keep track of which documents were viewed by whom. This is essential for proving the compliance of internal policies and legal requirements, particularly when multiple parties are looking over the same data.

An online data room is a convenient method for private equity companies and funds to share fund documents including tax information and portfolio documents with investors. It can also be used to give an impression of professionalism to prospective buyers. This is vital for M&A processes. They can also streamline their projects and conclude deals more quickly by using a virtual dataroom.