A secure virtual dataroom is a repository online that allows you to store and share sensitive documents in a controlled environment. These specialized solutions are vital to support complex projects as well as business processes that require the disclosure of confidential information to people beyond the firewall of an organization. This includes M&A and litigation processes, as well as due diligence for PE/VC investments and fundraising.
Unlike generic file sharing services like Google Drive or Dropbox, data rooms are focused on security at the document and system level. They rely on advanced encryption both in both in transit and at rest, as well as multi-level authentication techniques. They also offer features like watermarking, disabled print, and blind view to protect against accidental disclosures.
Some VDR providers make huge claims about the security of their systems by using terms like ‘most secure virtual data room and a highly secure data room’. Any system that allows users to share login information or documents with non-authorized users is not secure. Even 2-factor authentication browse around this site doesn’t hinder this as a user could easily forward the second link to anyone else.
Choose an VDR provider that has ISO 27001 accreditation – this is the gold standard for information security management systems. You should also consider a system that provides detailed activity tracking and precise permissions, to allow you to see which documents are accessed by who. This is crucial for M&A and fundraising processes as it can provide insight into the level of interest that the shared documents generate with bidders.