Virtual Data Rooms: Everything You Need to Know to Get Started
Not long ago, data rooms were the ‘in thing.’ Important company documents such as contracts, corporate documents, and all documents of privileged nature were stored in physical buildings. Investors, lawyers, brokers, and banking agents would visit these physical rooms at specific times to view documents required for business transactions. In 2021, physical data rooms are now a thing of the past as they have been replaced by virtual data rooms.
As the name suggests virtual data rooms are secure online storage for all your digital documents. A virtual data room (VDR) limits access thus enabling only those who are authorized to access information. VDRS are especially important during extensive financial transactions such as mergers and acquisitions, IPOs, and fundraising. For the best VDRs in the market, visit https://www.firmex.com/ and get a quote or book a demo.
Here is everything you need to know before you get started on using a virtual data room.
- A Virtual Data Room Can Be Accessed from Anywhere in The World by Authorized Users
Compared to physical data rooms where bidders, buyers, and sellers had to fly or travel to the country or region to be available throughout the due diligence process, VDRs enable all the stakeholders to be available and access documents remotely. During Mergers and acquisitions, IPOs, and fundraising campaigns, a lot of paperwork, document sharing, and collaboration is involved.
VDRs have enabled many companies to securely store sensitive information and make it available for all authorized users whenever they need it regardless of their location in the world. One great advantage of using a VDR is, when the users no longer require access to view the documents, the permissions can be easily revoked and this includes documents that had been previously downloaded.
- VDRs Are Secure
We are living in a world where businesses and companies alike are switching to online transactions leaving less of a paper trail and this is why security is now a top priority. VDRs are often used as a repository to hold sensitive or privileged documents and any content leak can be catastrophic. Modern virtual data rooms such as Firmex know how important it is for your business to secure your private information and that is why they are always improving on security features.
One of the security features you need to know about is the permission option. Your administrator can set the file permission to view only, download, or edit. If you don’t want your authorized users to download or edit any documents, you can set it to view only. The users will never be able to change any information on documents and this will give you the peace of mind you need during demanding projects transactions such as mergers and acquisitions or court proceedings.
You can also set permissions in a way that no user can save files to their personal laptops. This greatly reduces the leakage of information from team members and unauthorized staff.
Other additional security features you need to know about include; two-factor authentication which protects you from unauthorized entry, customizable allowances, and strict ID protocol among others.
- VDRs Enable Proper Tracking of Sensitive Information
Virtual data rooms enable you to track absolutely everything. From member Loggins, to how much time each user spent looking at a specific file to which documents have the highest viewing, VDRs can help you track it all.
Tracking features are important as they help you and your management team determine what is important to the stakeholders and this can help in closing the deal in a shorter time. Tracking also helps your management team get a feel of the project’s progress.