Throughout the entire existence of the business, during transactions, fundraisers, and other business processes, large volumes of documents were involved, which had to be exchanged with their potential partners. This has always been a very risky and cautious moment because data leakage or theft during their exchange was not uncommon and often hung over the activities of the company. Today, everything has changed, with the advent of virtual data rooms you can no longer fear for your data because this secure storage uses only the best security methods.
What is Virtual Data Room
Virtual Data Room is an online storage facility used to store and share confidential documents as well as actively used for investor recruitment, mergers and acquisitions, and due diligence.
- The VDR serves as a repository for valuable data that may need to be accessed by multiple third parties
- The most popular way to use the VDR is in M&A transactions, project work, and company-to-company document exchange in a completely secure environment
- The main advantage of a VDR is that it is almost 100% secure compared to a physical storage unit, as it reduces the need for paper documents that are easily damaged, lost, or stolen
- Documents from the VDRs cannot be copied or printed, and thus are resistant to theft
Understanding Virtual Data Rooms
Virtual data rooms came to us from the 2000s and have since completely replaced physical storage, with the advancement of technology this was inevitable. VDRs offer much more favorable conditions for document storage, they are flexible and available 24/7, they are much more economical because you do not have to pay for rent, printing, and stapling, and they are several times more secure than their progeny.
Every year businessmen start paying more and more attention to the proper security of their important company information because the number of incidents of cybercrime is also not standing still. That’s why VDR developers are applying more and more sophisticated protection methods to their programs.
Use of Virtual Data Rooms
Below we will describe the areas where secure data room is used and how it helps to manage these processes:
- M&A procedures – during a transaction, this program provides a place for the due diligence that your potential partner is so interested in. VDR facilitates the secure exchange of documents between companies during negotiations so that no intruder can intercept your confidential information
- Mutually beneficial partnership – if companies decide to work on a joint project this will require the transfer and review of large amounts of information. With VDRs, you can give your partners access to view and edit certain information for better collaboration
- Auditing company practices – the data room helps you comply with regulatory and accounting requirements. Upload to VDR all the information you need for comprehensive analysis of your company so lawyers, accountants, internal and external regulators have a central access point. Using a central system reduces errors and time. It also provides transparency of communication
- The initial public offering (IPO) is quite a complex task that demands a lot of documentation. As with an audit, clarity in the process is very important. Corporations must produce, share, store and manage a large number of papers. Due to the deal’s nature, the majority of users will have restricted access, such as “view only.” The ability to copy, transfer or print may be forbidden