A virtual data room (often also called a VDR) is defined as, “an online repository of information that is used for the storing and distribution of documents.” But that definition only scratches the surface of the power behind a VDR and the many benefits it can provide to your business.
Deal Room Uses
More than simply document storage, a virtual data room serves as a multi-functional platform for a variety of uses, including:
Corporate Repository: Many businesses have employees scattered all across different offices, so a virtual data can serve as the private and secure cloud where employees can access data and documents no matter where they are geographically located, so long as they have been granted acces by an administrator. (More on this in Part 2 of this series.)
Fundraising: During the fund application process, a company should demonstrate a history of positive performance to their potential investors. A VDR provides a place to securely store all financial and reporting information and grants limited access to investors for auditing and reporting purposes.
Mergers and Acquisitions: One of the most popular reasons to get a VDR involves the M&A process. Reason being, a VDR eliminates the need for a physical deal room but still serves as a place to review the business details securely, make offers, and ask questions.
Due Diligence: VDRs provide the ability for multiple parties to complete due diligence at the same time. During mergers or fundraising, any approved decision-maker can view sensitive documentation within a controlled and secure environment.
Sharing Files: When employees or external resources need to gain access to sensitive or large files email just doesn’t cut it. A VDR allows you to store your important information and permit access to those who need it, when they need it.
VDRs like SecureDocs take document exchange to a new level with functionality that makes sense for businesses who rely on a highly secure but user-friendly interface. Some of these features include:
- Document Security: VDRs provide safeguards for proprietary information with features like dynamic watermarking, read-only option for Office and .pdf documents as well as end-to-end data encryption.
- Permission-Based User Roles: A VDR should allow you to create a permission profile that identifies the folders a user can gain access to.
- Keyword Searches: Allows individuals to quickly locate and process information, speeding up the transaction.
- Activity Alerts: Ensures all users can quickly get access to recently added documents via email notifications and audit logs.
“What could happen if we don’t use a VDR?”
You may think that simply providing a secure environment may be all you need to share information during deals or negotiations, but there are often many more factors to consider. A VDR provides the ability to set security, add or remove users, change access to certain documentation and respond rapidly to remove access if the mood within the negotiation or project shifts. Services like Dropbox are wonderful tools for simplistic processes, but during highly-sensitive document exchanges, a VDR should be the trusted resource to control and manage the process. Additionally, most organizations already understand that VDRs are the professional choice during a transaction. Using a free service could imply a lack of professionalism or concern for the private information the potential investor or client could soon be liable for.
Don't take the chance to lose trust or opportunities, use a VDR like SecureDocs to securely store your business documents.