Due diligence can be performed more effectively by using the virtual data room.
Business-related matters such as mergers and aquisitions can easily involve thousands of paper documents that need to be stored, shared, read, commented on, and tracked. This is not only demanding, but also expensive.
Technology called a virtual data room or virtual deal room (VDR) provides a collaborative online workspace that is replacing traditional conference rooms filled with cardboard boxes. VDRs give legal staff a way to provide and manage access to necessary documents without any need to handle files, scans stored on CDs or sent by e-mail.
VDR services increased from 5 percent five years ago to 50 percent today. Providers report annual growth between 200 percent and 300 percent. This number concerns both sales revenue and number of users.
What took couple of months and a few trees, can now be done in matter of days. The documents are online and can be accessed from anywhere where is an Internet connection, so nobody has to travel to rooms, where documents were prepared for legal or other review and nobody has to manage supervision to stop anyone from taking them away or copying them. Nobody has to ensure that everything is ready in a physical data room. Aside from the cost savings, this also means that when participants do travel, they don't have to worry whether they have the right documents with them.
Furthermore, the documents are more secure. Participants in the transaction must sign in to the electronic data room with a password, and the privileges can be set up to grant or restrict access to the documents on a section-by-section or even document-by-document basis. Some visitors might be able to print a watermarked version of a document but not save it to their local computer; others might be allowed to read online but neither print nor download; and so on.