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A virtual data room (VDR) is a secure platform for sharing sensitive documents with granular security and customizable access rights. A VDR is more sophisticated than basic storage solutions which typically allow only viewing and downloading. It also permits simple collaboration between multiple parties, and can customize access privileges.

Due diligence can be a long process, requiring many parties to go through a large amount of information. It can lead to long and drawn out deals or even the death of the deal if the documentation is not complete and properly prepared. A VDR is a central place to store all the relevant information to be reviewed and shared by various parties, thereby avoiding delays caused by miscommunication, or the absence of documentation.

VDRs can be used for a range of commercial purposes, including the preparation of portfolio companies for public listing or for fundraising, in which the company is required to share confidential financial documents with other parties. These tools are very convenient for investors as they organize documents into logical subfolders to facilitate navigation, and also grant access rights with just a click.

For the life science industry, a virtual data room is an ideal way to share confidential intellectual property with investors and potential partners. With the ability to track document activity in granular detail, a VDR allows users to see exactly who has viewed which documents and for how long. This information can be helpful in determining if a particular project is sufficiently researched and inciting interest among potential investors. It can also help avoid the risk of divulging confidential information to wrong people.