Virtual Data Rooms are a case where something was not recognized when it was created because its emergence happened before its time. In other words, VDR solutions have only recently gained popularity, although the first such spaces appeared back in the early 2000s. In a world of digitalization, businesses have revised their requirements and priorities; therefore, security is a fundamental aspect of any business activity. Data rooms meet many of today’s business requirements, and in this article, you will learn why every modern company needs its services.
What is a virtual data room?
A virtual data room is a secure online storage facility for saving and sharing confidential documents. It serves as a so-called dome that shields you and your potential partners and customers from external threats and does not require outside tools for document sharing and communication. In other words, even the most complex transactions can be performed inside VDRs because the solution offers all the necessary conditions.
What VDRs are used for – the main options
Every modern firm needs quality data. And although it is only now beginning to explore the potential of data in business, a virtual data room is already ready to provide you with the solution you need to manage your sensitive data in quality and secure manner. The most common uses for VDRs are:
- Mergers and acquisitions
VDRs can support a company through the life cycle of an M&A transaction and provide a particularly useful service during due diligence. The Data Room allows you to store and share vast amounts of data with multiple teams of potential buyers in a secure environment.
- Fundraising
Companies can provide flexible access to their sensitive data for investors, greatly speeding up the fundraising process. Users can request additional documents or ask questions from any device and location.
- Strategic Partnerships
Sharing important documents with potential partners becomes much easier because you can now set different file access restrictions and monitor the actions of other users in the paper.
- Communications
Your team can safely discuss all necessary matters in a confidential environment.
- Consultation
VDR offers a fully controlled environment, which is important for consulting businesses.
Thus, VDRs can be useful for various business sectors, such as real estate, law firms, investment banking, startups, corporate development, and many others.
Key benefits of data rooms
The main difference between data room and other file-sharing platforms is its security. Also, it offers flexible document and user management tools and a simple interface. Let’s break this down in more detail:
- Security
VDRs are certified solutions that are internationally recognized for security. They offer multi-layered security that protects against external and internal data breaches. To do this, data rooms use advanced encryption and dual authentication methods to protect documents’ entry, storage, and transfer. Also, they offer watermarks and detailed access permissions – which would enhance the integrity of records during their interactions with third-party users.
- Management tools
VDRs automate many processes for managing both documents and users. For example, organizing your file structure becomes much easier with bulk uploads, automatic indexing, categorization, document conversion, and smart search. The program also offers automatic updates notifications (questions left, annotations, comments, etc.) within the space and automatic data synchronization.
- Easy to use
VDR providers try to create interfaces that are as simple as possible so that they don’t take a lot of time to adapt and train your staff. In addition, VDRs have a responsive support team that will answer any question or even provides training.