Virtual data rooms are amongst the latest cloud-based technologies for online data storage. Millions of professionals, businesses, and deal-makers use virtual data room software for data distribution, storage, and management.
The primary consumption of online data room software comes in deal-making. Private equity firms and the corporate sector have been intermediating M&As, joint ventures, consolidations, real estate trades, and fundraising with data room software.
How can you manage your business deals with dataroom software? Here is an introduction to data room software and its benefits in deal-making.
What is online data room software?
Online data room software, as mentioned above, is a digital, cloud-based document repository for storing, distributing, exchanging, and managing corporate documents.
Data security is the major reason why electronic data room software became immensely popular in the business fraternity. A virtual data room, unlike free online data-sharing tools, is hosted by certified virtual data room providers. Common VDR certifications include ISO 27001, 27017, 27081, HIPAA, FINRA, SOC2, GDPR, and SSAE 16.
Virtual data rooms can be distinguished due to their wide range of collaboration tools. Standard data room software has meeting management tools, chat messengers, and Q&A modules. Not many data management solutions come with such a versatile set of features. You can read more about other features that data rooms have to offer at https://dataroom-rating.us/fundraising/.
Benefits of virtual data rooms in business deals
1. Highest level of data security
No amount of words can emphasize enough the importance of security in data management. You are exposed to potential data leaks and thefts when you share your company documents in business deals. Online data room software gives you the highest level of security during your business deals. Here are a few distinguishing security features in the VDRs.
- Document access control. During dealing with external parties, you can invite users to your data room and give them limited access to your files. VDRs allow you to decide who can or cannot perform any specific function on any document. Features like Fence View and View-only make sure that no user can steal your important files in any way. Fence View even protects the file from being photographed or scanned.
- Remote device purging. If you realize that any user’s device has been stolen or lost, you can immediately remove it from your online data room and all the files in it (downloaded from your VDR).
- Two-factor authorization. VDRs ensure that only legitimate users can log in with the right credentials. Two-factor authorization requires the users to log in after entering the correct password and a temporary code sent to their mobile numbers or email addresses.
Other mentionable features include digital watermarks, document access revocation, customizable NDAs, and audit logs.
2. Faster data sharing
The importance of timely access to documents in business deals is undeniable. Virtual data room software makes it easy for every authorized user to access, share, and distribute data quickly. Many data room vendors come with dedicated mobile apps allowing you to access files anytime and anywhere.
VDRs have bulk upload and drag-n-drop features, which you can use to upload multiple files at once. You can also use the batch-sharing feature and send hundreds of documents to multiple users simultaneously.
3. Real-time communication
Virtual data rooms provide multiple communication tools for your communication needs in business deals. If a physical meeting is not possible, you can invite other parties to join you in an audio or video conference on your VDR. You can prepare and distribute meeting agendas, record meeting minutes, assign and manage roles during meetings, and record video footage of your VDR meetings.
Dataroom software has a Q&A module specifically designed for these types of transactions. All parties involved in the transaction can ask questions and get answers in real-time.
4. Trustable platform for all parties
Online data room software is a great tool for building an atmosphere of trust. Thanks to the audit logs in the VDRs, you, investors, stakeholders, and other businesses involved in the transaction can get complete reports on everything happening in the data room. It can be login details and all activities performed on documents, etc. When everything is on the record, you can win everyone’s trust.
5. Cost-effective solution
Hiring virtual data room services can reduce your administrative costs in multiple ways. First, you don’t need the services of IT experts to install or set up your data room. You will get free guides and training sessions from your vendor.
Second, you can get rid of a messy paper documentation system and save thousands of dollars every year spent on paper and printing expenses.
Third, you can save the traveling and meeting expenses during the transactions. Fourth, you can save the amount you have to spend on database hardware.
Final words
Virtual data rooms are highly safe and remotely accessible data management solutions for business deals. They help companies safely share their important data, ensure faster communication, and minimize the costs of transactions.