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Maximizing the Power of Virtual Data Rooms

By Joel Ginsberg
November 26, 2007

A virtual data room ('VDR') is a secure Web-based version of a traditional physical data room used to facilitate document exchange and review in connection with corporate transactions. The technology emerged within the early 1990s to facilitate mergers and acquisitions and loan syndication transactions, and today supports a range of legal and financial transactions, such as IPOs and other securities transactions, real estate financings, private equity, venture capital, corporate restructuring and litigation matters.

VDRs offer legal and financial professionals an array of advantages. Overall, VDRs make it possible for lawyers and other deal advisers to focus more on the substantive work to be done and less on procedural aspects of deal management. By making the data room accessible over the Internet, VDRs help to accelerate the pace of the due diligence process. VDRs provide interested parties with convenient and instant access to deal-related documentation while reducing administrative expenses. Furthermore, VDRs provide professionals with the ability to monitor data room activity, including who accesses data room information and who views specific documents.

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