Virtual data rooms are an efficient way to share documents with external parties in due diligence and other M&A transactions. How effective the solution can be depends on how well it’s set up and used.

Choose a VDR service that has been designed with serious sharing in mind. It should offer a variety of tools that permit users to upload and share large quantities of files. It should also allow administrators to create folders and create document indexes. It should have a robust search tool that enables users to locate documents quickly. The service should allow users to print and download PDF documents that have watermarks. Administrators should be able track the times when documents are downloaded and printed.

When selecting a vendor, consider whether it offers an annual subscription or a one-time transaction. An annual subscription offers more flexibility and a lower cost of ownership. It also reduces the chance of unexpected price increases during the life of the contract.

A reliable VDR should support a variety of platforms and browsers, including Mac and Linux. It should be able to handle any file format. It should also be easy to personalize a virtual room’s appearance and feel by using personalized branding.

Verify that the VDR is equipped with strong security features to ward off unauthorized access. The service provider should, for example, offer multi-factor authentication, as well as impersonation of the user. It should also allow administrators to set a session limit, that will automatically end the user’s session when they are inactive for a certain period of time.