Secure Virtual Data Room

A secure virtual data room is a secure online repository that allows for the storage and sharing sensitive documentation in a controlled setting. These specific solutions can be essential in assisting with complex projects and processes that require the sharing of confidential information with parties outside the firewall of an organization. This includes M&A litigation, due diligence required for PE/VC investment and fundraising.

Contrary to common file sharing services, such as Google Drive or Dropbox, data rooms concentrate on security at both the level of the system and at the document level. They rely on advanced encryption during transport and at rest, and multi-level authentication methods. They also offer features such as watermarking, disabled print, and blind view in order to protect against accidental disclosures.

Some VDR providers make big claims about how secure their systems are – using terms such as “most secure virtual data room’ and ‘highly secure data room’. Any system that allows users to share login details or documents with users who are not authorized is not secure. Even 2 factor authentication does not hinder this because a user can easily forward the second link to others.

You should seek out an VDR that is certified with ISO 27001 certification – it is the gold standard in security management systems for information. Choose a VDR provider that provides precise activity tracking as well as granular access permissions that allow you to track who has accessed which documents. This is particularly crucial for M&A or fundraising activities, as it can provide you with insights into the level of interest your shared files are generating among bidders.

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