A secure virtual data room (also called a VDR, electronic data room, or an online due diligence platform) allows companies to share crucial documents with other parties on the internet in a secure environment. During business transactions like M&A and real estate transactions, fundraising and IPOs documents shared can contain confidential information and trade secrets. They must be secured from cyber threats.

A VDR offers a variety of security and control features, in contrast to file sharing services that only offer basic upload, storage and downloading capabilities, which can be a security risk. Examples include granular permissions for documents, restrictions on viewing, printing and downloading, dynamic watermarking and two-factor authentication. A virtual data room is constantly backed up, and its integrity is monitored to ensure that files cannot be deleted accidentally.

VDR providers help businesses with complex transactions like M&A due diligence and boost efficiency by providing powerful collaboration tools. For instance, a virtual data room provides an area for Q&A where internal and external stakeholders can communicate. This feature lets you reduce time by removing the need for meetings and makes it easier to track document changes.

The best VDRs also have robust physical security measures, including backups offsite along with fire protection and biometric access. They have a business continuity plan and perform regular penetration testing to ensure that data is not lost. They also use multiple layers of protection against ransomware, as well secure virtual data room as other cyber attacks. They also have disaster recovery systems that include the ability to repeatedly fail over and data center recovery testing. FirmRoom for instance, backups customer data and servers every day, ensuring that data is never lost.