Image Courtesy Of Anas Alshanti
Before the advent of the digital age, physical data rooms were used to securely store data files, as well as share and disclose information between parties. However, as we progress technologically, there came the need to find a secure method of storing data online. In the case of an actual data room, doors are secured using physical security mechanisms. Of course, the case is somewhat different when it comes to online data. In just the year 2008 alone, the amount of data that created surpassed 487 billion gigabytes. And with so much data, having it protected is a necessity. So how can data be safely secured? To solve this conundrum, a solution was developed in the form of a Virtual Data Room (VDR).
In their early days, VDRs were used to secure debt underwriting documents. However, we have currently seen it be utilized by all types of industries that have use for it. Below, we take a look at the reasons why your startup is much safer when taking advantage of VDRs.
Safe and Secure Means of Sharing & Storing Data
Virtual data rooms only provide entry to authorized users and block any unauthorized attempts at access. They have been used by many high-level projects for storage and retrieval of data that holding sensitive info, which include medical field clinical trials, mergers & acquisitions and more.
In a VDR, users are able to work together, share and review sensitive data, collaborate on projects, carry out due diligence, all with a very secure environment. This all helps to create a safe and secure business network for your startup venture.
Easier Decision Making/Room For Time-Sensitive Projects
VDRs are accessible from remote places anywhere in the world, eliminating the barrier of geographical distance. Able to create, edit, and review timely and sensitive documents are now easier than ever. They also eliminate the issue of time zones, giving access to authorized users 24/7.
Facilitation of Due Diligence
Due diligence are the steps taken to meet legal compliance requirements before products can be bought or sold. This is aided by using VDR as virtual data rooms are designed in such a way that even the tiniest adjustment, addition or deletion is properly documented. An automatic log is created that can be used as evidence of compliance in a legal process where due diligence is concerned.
Conservation Of Financial Resources
Since the inception of the first set of VDRs, companies have saved themselves plenty of money. By eliminating the overhead cost that comes with the use of physical file rooms, including printing, paper files, and paying for site security – companies are able to save considerable amounts of money.
It also takes out the tedious work of editing, auditing and filing hard copy files, and you are saved the stress of copying and mailing documentation for legal teams to review.
Facilitate Transparency and Full Disclosure
There are some processes with documentation that require lots of details, such as mergers and acquisitions (M&A). For a process like this, there must be transparency in the details involved to make sure what is been bought or sold is of fair value. Making use of VDR provides instant updates to all parties involved once new files are added or removed.
VDR makes it easy for buyers to be updated about any gaps in information, and for sellers to identify the possible pros/cons in a process such as M&A. Involved parties can also calculate what might interest buyers most. Additionally, all potential buyers have the same access to the same information.
It has been over a decade since VDRs were introduced and they are steadily gaining influence. Nowadays, you can’t talk about due diligence without mentioning VDRs. They have been crucial in deal management.
As a startup business, VDR is one of the many ways of keeping your business safe. Notwithstanding, it is a part of several solutions to deal management that a business needs. Other solutions include CRM (Customer Relationship Management), Mergers and Acquisitions Accelerators, etc., which can all be packed into one platform as offered by SmartRoom. You can click here to learn more about how your startup can benefit.
It doesn’t matter if VDRs are used alongside physical data room or as a separate tool, virtual data rooms have increased the data sharing capability of companies instantaneously. They can assist several authorized and concerned parties while speeding up the process for time-sensitive deals. VDR has proven itself a valuable tool that makes it a must-have for serious businesses.