Data is the most valuable asset for many types of businesses, and therefore its security comes first. But in the ever-changing environment of the Internet, storing data can be a challenge. On the one hand, hackers are constantly developing new hacking schemes; on the other, the emergence of new rules and privacy measures keeps entrepreneurs at bay. However, by using a virtual data room, many of the problems associated with storing and sharing data can be solved. In addition to the storage function, VDRs are also used for other purposes, which we will discuss in more detail in this article.
M&A due diligence
Virtual data rooms were created to help businesses conduct complex due diligence and M&A processes and only later expanded to other industries and functions. However, conducting due diligence is still the most popular way to use VDRs because the solution perfectly satisfies all requirements during this process. The parties do not need to meet in person, and all issues and techniques can be resolved within the secure space. In addition, since many confidential documents need to be exchanged during due diligence, VDR offers multiple layers of protection and automation features to expedite and streamline the transaction’s closing.
Data Rooms is different from other data exchange programs because it provides a fully controlled space and advanced security features. As a result, you can leave your worries about data leakage’s internal and external threats behind.
Fudraising
The data room has found its application in the capital-raising process because, to do fundraising, you need to give potential investors access to the most sensitive data. The VDR provides a fully secure online space and convenient preview features that speed up reviewing documents. Another data room feature that is an asset to fundraising is the ability to assign tasks, and deadlines, track progress and send messages. A convenient workspace and full transparency of the entire process are crucial to investors and lenders.
Legal Document Management
Law firms deal with confidential documents all the time, and so the data room becomes a great outlet to securely store and share this data with clients and colleagues alike. In addition, VDR’s flexible access allows authorized users to log in and work on documents at any time and from any device or location.
The platform also offers convenient collaboration tools, which can be helpful in many situations, such as when working on class action lawsuits. For example, assign explicit permissions to each folder and file, and discuss confidential topics in a space you can trust.
Managing Regulatory Risks
Changes in laws and regulations that affect a business are pretty standard, and companies can get into trouble afterward. For example, depending on the changes adopted at the legislative level, companies may suffer from the depreciation of their investments and problems selling their goods and services. In such cases, all of your confidential documents, reports, and other files need to be well organized and securely stored to start validating your activities by the laws. When you’re faced with such a rad problem, you don’t want to deal with the administrative issues and shortcomings of your document management system. Instead, quickly find and share the necessary documentation with third-party users within the VDR safe space and track users’ actions within the document. This way, the regulatory risk management process becomes more accessible and safer.