A virtual data room is a system that enables companies to share sensitive information with several parties at once. It streamlines due diligence, safeguards confidential documents and facilitates collaboration during M&A deals. It’s also an excellent tool for capital raising and investment banking, including IPOs.

When selecting the best VDR there are a variety of factors to take into consideration including cost and features user-friendliness, as well as customer service. Certain VDR providers offer flat-rate fees for access to their entire system whereas others charge per user or document. They that charge an annual fee are likely to be more economical but they might not have the flexibility and security of a more robust system.

Many traditional VDR providers were created in the M&A space and have their roots in the M&A industry. They usually operate on the per-document or per user fee model that is ideal if you only need to share a limited amount of documents for a project. However, it can cost you a lot if due diligence you have to share files with many users.

Modern VDRs that are designed for business will have advanced document processing capabilities that let you search text across all types of documents. This can make a significant difference in the time it takes to locate what you need, especially in the case of thousands of documents. This can be particularly important when you have to locate the documentation of an acquisition target. You can then quickly evaluate the potential buyer and finalize an acquisition with confidence.