A virtual data room offers easy access to documents that are sensitive via a secure agent application or web-based portal. It is commonly used for M&A transactions and asset management. Due diligence, IPOs, and joint venture investments are also popular uses.

For www.dataroom360.com/how-a-virtual-data-room-works-and-why-they-are-useful/ instance life science companies need to communicate with investors and share information about everything from the results of clinical trials and HIPAA compliance to licensing intellectual property and storing patient files. This type of sharing requires transparency, and the VDR ensures that each document is easily accessible to the right people. It also records the date that the document was read or modified.

There’s also the legal industry where a mountain of paperwork can hinder the process of a smooth communication between attorneys and clients. This is why a lot of law firms rely on virtual data rooms to help keep track of important documents.

Other industries employ VDRs in the same manner they do, whether to conduct research and development or collaborate with contractors during construction of a building or delivery of services. All of these scenarios require the transfer and storage of large amounts of data. A well-designed dataroom has all of the tools needed to complete this task seamlessly and securely. This includes audit trails and versioning, which reveal who changed the document and at what time. This is very useful when you want to establish who did certain edits or changes, which is often the case in professional settings.