When companies are about to sign a contract, they need a place to store the information, organize it, and then create reports to help with due diligence. This is where virtual data rooms come in, helping companies manage their transactions efficiently and increase the their potential.
The most common use case for virtual data rooms is M&A due diligence, although they can also be used by any business that wishes to securely share confidential documentation with third parties. The information could range from manuals to contracts and even intellectual property like patents and invention assignments. The availability of this information in a virtual data room is more convenient and secure than handing out physical documents which could be stolen or destroyed.
A VDR can help in reducing operational costs. If a company decides to go with a VDR it won’t need to lease a physical space and employ security to watch over it at all times. This can quickly increase the cost. The only thing a VDR requires is an encrypted computer system and access to online documents, which translates into a lower operating cost than an on-site physical data room.
People are attracted by a VDR because of its secure nature. Administrators can restrict access to a document by limiting the number of hours it is accessible or the IP address of the user logging in. This will stop someone from taking photos of a document or peeking behind a user’s back to see what’s displayed on the screen.
