Virtual data room software is a secure repository which allows users to view confidential information in a secure environment during due diligence and other business transactions. It provides a high level of security protocols that common file sharing platforms lack, such as the ability to grant user permissions in granular ways, encryption at rest and while in transit, two factor visit this page authentication as well as content watermarking and audit trails that provide logins as well as downloads, uploads and logins. These features limit the possibility of theft of intellectual property and unauthorized access to confidential corporate and financial information that could undermine transactions or result in lawsuits.

A virtual data room is most commonly used to share IP documents with third parties, such as potential purchasers and licensing partners during M&A due-diligence. The ability to scale virtual data rooms makes them useful for sharing large or confidential documents with internal teams and the stakeholders. They also facilitate collaboration with auditors, outside counsels, or consultants.

Using a virtual data room for bankruptcy or restructuring due diligence is a great way to streamline the process with other participants. These transactions require a review of the financial performance of a firm and its debt, accounting reports and budgets for capital expenditures and legal contracts, liens, and credit reports for customers. A robust data room security system is required to prevent unauthorized access to these crucial documents and to protect the integrity of the transaction.