A Virtual Data Room (VDR) is an online accessible archive of sensitive data that can be viewed and edited at any time and from anywhere. It thus differs from a physical data room. As a protected and neutral space, virtual data rooms are becoming increasingly important, especially in cross-company projects. This is where sensitive and time-critical documents are made available to several parties (over a period of time).
Protected and neutral: this is a virtual data room
You can usually access a virtual data room in two different ways. The data stored in the cloud can be accessed either via the web browser or a special VDR application. In most cases, the files are displayed in the Web browser as on the local hard disk, thus providing a quick overview of all the documents. To edit them, however, you often need to download the confidential documents and then upload them back to the cloud. This is a potential source of error, especially for companies that have little experience with online data rooms. Special VDR applications such as TeamDrive make the data room look like a local folder for each user. This is either replicated locally or synchronized virtually.
From real estate documentation to M&A: Virtual data room in the application
Especially for “paper-intensive” transactions between several companies such as loan syndications, private equity or mergers & acquisitions, the management in such a data room is a real revolution: The digitalization of the documents saves resources and at the same time allows all parties involved a more convenient and secure access to the relevant files. These three examples show how different the application scenarios for virtual data rooms can be:
1. virtual data rooms for real estate documentation
When managing real estate projects, project managers must make a variety of documents – from construction plans to documentation to reports – available to different pages. As negotiations progress, you can make additional documents available to selected partners in the virtual data room. Digital data rooms not only make this information available centrally and quickly, but can also remain accessible as a digital archive after a deal has been realized.
2. virtual data rooms for board communication
The management of companies increasingly takes place across locations. This also presents managers with the challenge of finding secure solutions for board and management communication. These must meet the often strict compliance requirements. Virtual data rooms not only enable fast, secure and location-independent access to confidential files such as business reports or balance sheets, but are also ideal shared storage for documents before internal or external publication. Virtual data rooms are particularly suitable for the inclusion of external persons, such as consultants or supervisory board members, in a confidential collaboration.
3. virtual data rooms for mergers & acquisitions
Between due diligence and strictly planned closing deadlines, company sales are among the most complex tasks for sellers and buyers alike. A secure data room also simplifies the sales process. For example, you can assign different read, delete, or write permissions to individual folders or documents. In addition, unlike in a physical data room, you can ensure that only the desired documents are accessible. In addition, you cannot leave the data room without mutual consent.
Safety First: Virtual data room creates data security
Irrespective of the industry, the main task of such software is to manage documents efficiently, store them securely and, if necessary, enable transactions with other users. Since sensitive data is also shared in such data rooms, data security has absolute priority in VDR applications, which can be ensured by means of logon and authentication procedures, dynamic watermarks or temporary and local access. The loss of confidential information can not only lead to the end of business partnerships, but in the worst case also have far-reaching legal consequences. Data security is therefore one of the non-negotiable requirements when choosing the right provider for collaboration on a platform.
Under the motto “Security by Design“, TeamDrive, the data room provider, relies on automatic end-to-end encryption that guarantees the security of confidential data in its own network and beyond network boundaries. This protection has been awarded and certified by the Independent State Centre for Data Protection Schleswig-Holstein – and distinguishes TeamDrive from other providers.
