What are virtual data rooms (VDRs)?
Virtual data rooms (VDR) are secure online spaces for sharing confidential documents beyond the corporate firewall. VDRs are typically used to support M&A due diligence, financings, litigation, and compliance activities where disclosing sensitive information and large-scale collaboration with security measures are required. VDRs typically offer a range of engagement tracking features, so, e.g., the seller of a business can see how seriously prospective buyers are taking diligence, and what areas prospective buyers are spending time (or not spending time) in.
How Contracts AI can help in VDRs
Contracts AI has become heavily used around M&A due diligence. Since the documents bidders review in M&A due diligence tend to live in VDRs, it makes sense for VDR providers to incorporate Contracts AI directly into the VDR. This way:
- contract reviewers can get AI-enhanced diligence done without having to use both a VDR and a contract analysis software tool, and
- users won’t need to pass documents outside the VDR, removing security and other forms of friction that come with passing documents into an additional contract analysis AI tool. (Though there can still be advantages to users of using a dedicated contract analysis software system.)
Contract analysis software is already a thriving category. Contracts AI can enable VDR providers to engage in this space much more than they do today.