The use of virtual data rooms isn’t restricted to certain industries. Virtual data rooms can be used when a company needs to exchange confidential documents with other parties. This could be the case with a merger, acquisition, IPO or any other business transaction that requires the exchange of sensitive documents. In some cases the information required is to satisfy regulatory requirements such as how to provide simple due diligence file sharing when a firm needs to allow auditors and regulators in order to examine the company’s documents.

Virtual data rooms are utilized by a variety of firms to simplify due diligence in M&A transactions. Due diligence may involve the creation of a lot of documents that needs to be viewed by a number of interested parties. Being able to easily browse and download the documents in a VDR allows the process to move faster and more effectively.

Other companies make use of VDRs to facilitate document sharing for legal or regulatory reasons with lawyers, clients, and third party. A law firm, for instance might need access to client records and do so within a secure environment in order to ensure that it does not violate privacy laws.

A VDR can also allow businesses to automate processes, workflows and approvals. This can help reduce time and effort required to perform manual tasks such as signing an NDA or managing invoice approvals, or submitting files to be uploaded into a data room. A VDR with advanced document processing capabilities will be able to search for text of most types of documents, including PDFs as well as Excel files.