What is a Virtual Deal Room?

A virtual data room, also known as a virtual deal room, is an online repository of data that companies can use to store and share confidential information. When used in the dealmaking process, this software solution is usually referred to as a virtual deal room. The purpose of a virtual deal room is, as its namesake suggests, to expediate the dealmaking process and help companies make the transition to a paperless office so that any confidential documents that are being discussed or negotiated upon can easily be accessed and tracked by both parties.

To do this, a virtual deal room is stored on an extranet as opposed to an intranet. The difference here is that with an intranet, employees can openly communicate and collaborate. This is typically seen in the form of workplace communication and productivity software such as Slack or Trello. In contrast, an extranet provides controlled access to authorized users, making it a more gatekept version of an intranet. This is what makes an extranet-based virtual deal room a perfect solution for making deals.

In addition to this, a virtual deal room is designed to store and share corporate data, so it makes sense that it would be used during deals. The type of information stored on a virtual deal room is typically private documentation such as confidential financial records and contracts that are in the midst of negotiation that are often of the utmost value to companies. As the details of these deals cannot be disclosed to most members of the respective companies that are involved, it is important to be able to set access controls and permissions on confidential documents. Fortunately, this is another key feature of a virtual deal room, and it is one of that sets it apart from other solutions that are used for making deals.

In addition to this, virtual deal rooms can allow you make people who enter the deal room sign customizable NDAs as a condition of entering or accessing certain documents so that you can make sure that no liability is involved. This is helpful in quelling any corporate leaks and making sure that anyone who access to the virtual deal room understands the seriousness of the documents they are looking at. Aside for this, a virtual deal room can also allow you to archive and log all transactions so that you know exactly who has looked at what documents at what time.

Ultimately, a virtual deal room is one of the best ways to expediate the dealmaking process and make deals more secure and better for all. While there are other tools available on the market to make deals better, a virtual deal room is both a secure and comprehensive solution that takes a lot of the guesswork out of making deals. Using one will benefit a variety of organizations, from those who specialize in fundraising, to those who regularly make mergers or acquisitions, or even those who make investments in other companies.