The use of the virtual data room isn't limited to specific industries. Virtual data rooms can be used when a business has to share confidential documents with outside parties. This could be the case with the merger, acquisition, IPO or any other business transaction that requires the exchange of sensitive documents. In some cases the information required is for reasons of regulation, such as when a business needs to give access to regulators and auditors to review the company's documents.
Virtual data rooms are employed by a number of companies to facilitate due diligence in M&A transactions. The due diligence process may involve a massive amount of documentation that has to be reviewed by multiple interested parties. The ability to review and download documents on a VDR can make the process more efficient and cost-effective.
Other companies use VDRs to facilitate sharing of documents for legal or regulatory reasons with clients, legal teams as well as other third-party. A law firm, for example, may need to access client records and do so in a secure environment to avoid violating privacy laws.
A VDR can also be used by businesses to automate processes, workflows and approvals. This will reduce the amount of time and effort needed to do manual tasks like signing an NDA and managing invoices' approvals, or uploading files to the dataroom. A VDR with advanced document processing capabilities will be able to search for text of the majority of file types, including PDFs as well as Excel files.