A virtual dataroom is a cloud-based platform that lets multiple users access documents and communicate, as well as collaborate on projects without compromising confidential information or losing control over the data. They can be used for M&A fundraising, strategic reviews and internal document sharing.

The most reliable online datarooms provide the ability to control access in a way that is flexible as well as permissions settings, bespoke analysis, secure storage, and digital watermarking for downloaded files. They also offer a collaborative environment that is easy to use. They also offer templates and ways to streamline the uploading process.

An important feature is redaction, which blacks out parts of a document to ensure personally-identifiable information stays private. Certain VDRs have a fence-view feature that encloses the document within the form of a digital frame, which prevents screenshots. Other features include two-factor authentication, IP and time access restrictions, as well as a chat system that allows real-time communication between users. They can be hosted by a variety of providers. They also offer different pricing policies including pay-per page, pay-per user and a bespoke enterprise experience with unlimited users and a large storage capacity.

A well-organized data room will allow investors to feel confident that there won’t be unintentional surprises, which is essential in a deal process. It also shows that you’ve considered what information you’d like to share and that your business is serious. This will boost the value of the company. It is imperative that companies make use of an online data room when preparing for a potential investment or exit even if they’re not sure how long it will take to complete the deal.