When a corporation or company decides to enter into a contract it is required to offer the other party a large amount of documentation. In the past this would be done in a physical room that was erected on-site. With the advent of virtual technology as well as the speedy internet speeds, companies are moving away from physical data rooms towards an online data rooms. The reason is that VDRs are much simpler to use, and they are also home more secure than traditional methods.

VDRs consolidate files and provide an all-encompassing source of truth. This eliminates confusion and records on who accessed a file. This is a huge improvement over sending multiple drafts of a file in long email chains. It helps save time. Instead of having to search through an overcrowded Dropbox or drive for that version of the file, users can locate it immediately with a click of an icon.

Another advantage is that everything in the VDR is digitized. This makes it much easier to look through all documents and to conclude deals that would take months to complete.

VDRs assist in the process of manage due diligence. For instance, you can create a Q&A space where all questions and their answers are posted and discussed. Administrators can manage this process by dividing questions into categories, assigning answers to users and creating reports. It’s also helpful to gauge interest from prospective buyers, as administrators can keep track of who has viewed which documentation.