When it comes to modern-day business solutions, virtual data rooms stand amongst the most desired tools in the business fraternity. They have mainly gained popularity due to their supreme security systems and their employability in any business type or size.
What's more, a business can use data room virtual solutions for multiple reasons, such as online collaboration, board communications, data management, and deal or project management.
Keep reading to find out more details on how a data room can streamline your business transactions.
Virtual data room defined
A virtual data room or electronic data room is a cloud-based document storage and management solution for safely storing, sharing, distributing, or managing corporate information during business transactions or regular use.
In broader terms, VDRs are secure data rooms with advanced security mechanisms and are hosted by registered/certified virtual data room providers. A standard, high-end data room is usually ISO, FINRA, and SOC2 certified. What’s more, data room vendors operating in specific industries and regions are also FISMA, HIPPA, and GDPR-certified.
In addition to diverse data management tools, VDRs are richly equipped with collaboration tools for online business meetings, private communication, and Q&A tools. These tools, when combined, make a great platform for managing financial transactions.
How to streamline your business transactions with data rooms?
A virtual data room is not just a digital data storage tool, it's a fortress of trust where sensitive information, especially in complex business transactions, is safeguarded by cutting-edge technology, says Angleo Dean – CEO at datarooms.org.
The virtual data room market offers a large range of options, such as iDeals at https://www.idealsvdr.com, Merrill, Intralinks, Caplinked, Drooms, etc., for businesses. You can compare virtual data rooms on this website.
As mentioned above, data rooms are a fortress of trust. They solve the biggest problem during any external business transaction — data security. Here is what else they do.
1. Faster data access and sharing
If your business is involved in a potential M&A activity, you might want to speed up the process. It is almost impossible to make things faster with paper documentation because you can only deal with one buyer at a time.
Virtual data rooms allow you to upload data from the main account, create multiple data rooms, and then give access to all potential buyers simultaneously. Buyers can access documents at their own pace, and you can immediately share files upon request.
What’s more, accessing or searching documents in VDRs is unbelievably easy. You can locate any file by simply searching it with a keyword or key phrase.
2. Better data organization
Whether you are preparing a VDR for capital funding, IPO, or M&A, it is necessary to categorize data in the right manner. Data room providers specializing in these types of services often provide due diligence checklists prepared by industry experts. These checklists make sure you upload and arrange documents in the buyers' preferred manner.
3. Real-time collaboration
A high-end data room has everything a business needs to address communication woes during dealmaking. VDRs either have built-in online communication tools or you can integrate third-party applications like Zoom or Slack.
You can accommodate tens and hundreds of users during online meetings, create chat groups, and use Q&A tools when needed.
Note: if you are integrating a third-party app, make sure it is fully secure to avoid any data breach risks.
4. Greater transparency
One of the best things about online data rooms is that you can track all the activities taking place in your VDR. That includes who accessed what, when, and for how long. You can generate detailed reports on these activities and share them with your investors, shareholders, board members, and stakeholders. That way, everyone will have a close eye on how the deal progresses, creating an atmosphere of trust.
Things to consider when setting up a data room for dealmaking
During dealmaking, you allow external parties to access your VDR. That’s why it’s important to consider the following things:
- Choose a secure data room that specializes in your particular industry.
- Consider having features like secure fence view, document access revoke, and document shredding for external data sharing.
- Follow the due diligence checklist when uploading the documents.
- Define access levels, security settings, and permissions for users according to their role.
- Recheck the security settings twice or thrice before sending invites to the users.
Virtual data rooms are multipurpose solutions able to streamline your business transactions by:
- Providing much-needed digital protection
- Simplifying and speeding up data sharing
- Ensuring safer, real-time communication
However, it’s necessary to choose a certified data room with a proven track record to truly enjoy this technology's benefits.