Virtual data rooms come in a variety of types that are each designed for specific business needs. The most common use case is for M&A due diligence, but they can also be useful in collaboration on legal and fundraising projects as well as for any high-risk business activity that requires secure, private document handling.
The most effective VDR software platforms are designed to offer a flexible, scalable framework for managing sensitive data. They typically have a central dashboard with the same structure of folders as the physical file system, making it simple for users to categorize and organize documents. This is especially important if there are multiple parties accessing the data room simultaneously. It is also important to have advanced search features, which allows users to quickly find the documents they require without having to wade though endless paperwork.
A good virtual data space should also contain collaboration tools to make sharing and commenting easier. This allows users to give feedback on any document, and also more information share their queries directly with other parties, while keeping the negotiation process moving along. Most quality platforms also have annotation tools that permit users to take notes on documents they’re viewing. However the other party will not see these comments.
In terms of VDR types Red data rooms are designed to be used to handle processes that require deep confidentiality, whereas green rooms are able to balance security and an open-ended scope of access. The former is used in M&A due diligence, while the latter is a more popular tool for legal services or healthcare, as well as real estate.