The Battle For Dealmakers’ Trust – Scooptimes

Virtual data rooms(VDRs) and traditional data rooms facilitate due diligence, mergers, acquisitions, and legal proceedings. They can enable file storage and sharing at different security levels. 

Virtual Data Rooms

Virtual data rooms offer more advanced features than traditional data rooms. They make it more convenient when meeting with other team members from different office locations. Here are some of the elements of VDRs:

Online platform

VDRs are digital platforms that enable users to store, manage, and share documents over the Internet. Users can store contracts, financial statements, legal documents, and intellectual property records in a centralized data space. The documents are organized into folders and subfolders, making navigating and locating specific information more accessible. Data rooms are easy to use, making it intuitive to collaborate and find relevant data.


Data room software comes with top-notch security, allowing only individuals to access the files. VDRs use advanced encryption technologies to shield data from unauthorized access and cyberattacks. Many VDRs support two-factor authentication, requiring users to provide a secure verification method, boosting the security of the login process. VDRs maintain an audit trail that records user activities, such as document views, downloads, and edits. This feature provides a comprehensive history of interactions with each document and helps boost security.


Analytics and insights features let dealmakers know how other parties engage with the documents and information shared within the VDR. User behavior patterns can shed light on whether users spend more time on financial documents being viewed, downloaded, and shared, plus the frequency and duration of user visits. Such insights can help prioritize follow-up and negotiate efforts during deals.

Traditional Data Rooms

Traditional data rooms were used for business transactions before VDRs emerged. Here are some of the features they offer:

Physical Location

Traditional data rooms are physical spaces located within a company’s premises. Also known as physical data rooms, they allow in-person interaction among deal participants. Sensitive documents are stored in locked cabinets, safes, or vaults. Participants must be physically present at the data room’s location to access documents, which can be time-consuming and less convenient for international parties. Coordinating schedules for multiple parties to meet in a physical location can be challenging, hindering the deal process.

Privacy Concerns

Traditional data rooms could raise privacy issues due to the physical presence of individuals from different organizations in the same space. Security in traditional data rooms relies on physical locks, security personnel, and visitor logs, which can be unreliable compared to encryption features in VDRs. Keeping an audit trail in traditional data rooms can be more challenging, as it relies on physical sign-in sheets and visit logs. Documents can be susceptible to theft or unauthorized duplication due to the difficulty in tracking.

Invest in Virtual Data Rooms

Virtual data room software offers more robust security functionalities than physical data rooms. With VDRs, users can access the platform remotely instead of traveling to a physical location. With VDRs, the deal process can be efficient, effective, and convenient due to the software’s practical features.