Virtual data rooms, or VDRs, are secure cloud-based storage spaces that have revolutionized the vital function of corporate document management. If you don’t yet own a VDR, then it’s probably time you jumped on the bandwagon.

Virtual data rooms derive from a wide variety of applications, some of which are discussed below.

Here are the top 5 uses for a virtual data room:

Protection of Confidential Data

The most important function of a VDR is secure data storage. Every year, thousands of companies are infiltrated by hackers and malicious individuals who quickly gain access to private documents and use them for sabotage. The beauty of storing all your information in a virtual data room is their impenetrable firewall. VDRs employ multiple layers of security to ensure that stored contents are only accessed by authorized parties. These security strata include file encryption, multi-step authentication, document watermarking and data backup.

M&A Due Diligence

Virtual data rooms can also come in handy when conducting due diligence of mergers and acquisitions (M&A). In fact, this is a popular use for VDRs. Companies can execute online deals with ease, which eliminates the need for meeting in person to review crucial M&A paperwork and sign legal documents. The process of conducting due diligence involves exchanging hundreds of privileged information. Parties involved must therefore be guaranteed that assets and vital documents are properly safeguarded. Virtual data rooms can help you streamline and automate this important process.

Improved Data Management

Another important role of virtual data rooms is ensuring that data management is easy and efficient. A VDR allows companies to set user permissions and access controls. Every file that’s uploaded onto the cloud is tagged and classified. Employees can subsequently configure folders to control who can view, edit and delete certain documents. In addition, VDRs help to manage regulatory risks more efficiently. You can easily pull up important documents required for a routine audit. Tracking individuals who gain access and make changes to certain documents also becomes a walk in the part.

Raising Capital

Startups can also benefit immensely from virtual data rooms, especially when raising capital. Fundraisers and investors need to feel safe when providing their financial info. Having a VDR gives them enough confidence to transact with you since they know that their fiscal records are being stored in a secure online space. In addition, these rooms provide an interactive, user-friendly interface where investors can preview documents, images and reports with ease. Tasks and updates can be posted onto the VDR to keep users up-to-date with fundraising projects.

Conducting Speedy Deals

Every company knows how important it is to seal a lucrative deal quickly. Having all the required product data, financial reports and similar information at the ready will help you to deliver a high-quality pitch and potentially win your clients’ hearts. Virtual data rooms are highly reliable storage spaces that can be carried with you wherever you go. You can easily access your VDR on your laptop, tablet or smartphone. This remarkable availability helps you to conduct speedy deals whenever they show up.