Thanks to its cloud-based infrastructure combined with ease of use and built-in communication tools along with stringent security measures, virtual data room solutions changed the game how enterprises store and share data. This is even more important against the backdrop of the rapid rise in cybercrime in the financial sector, as virtual data room solutions constantly evolve their approach to digital security.
A virtual data room is making the physical paper-based data rooms a thing of the past, in their constant effort to improve communication between dealmakers. For sellers, data room solution has more clear benefits. If the physical data room required sellers to compile documents and present them in such a way that would help buyers locate the crucial data, this task was further complicated by the need to maintain the document order and schedule access of sellers to the data room. Add to that the ongoing challenge to improve efficiency and keep anonymous buyers from crossing paths with each other, especially as some sellers had to manage several physical data rooms at the same time. Such enormous financial and time requirements greatly increased the deal timeframe and added to the complexity.
Thanks to the virtual data room solutions all sellers need to do are to scan the documents and upload them to a cloud-based library where all deal-related documentation is indexed and kept secure in a closely monitored environment. Access to documents can be controlled by the seller who doesn’t have to be physically present at the document archive. Multiple buyers may perform due diligence simultaneously, which helps increase the exposure of the deal to buyers worldwide.
Data room solutions for sellers also have numerous advantages, since they now have access to a large number of buyers and can close deals on better terms. Having due diligence completed through a virtual data room solution helps enforce best practices in data management while also delivering real-time insight for the dealmakers. Thanks to advanced reporting tools offered by most of the VDR providers enables sellers to quickly access detailed reports allowing to gauge the interest of buyers and identify areas of concern.
Cost-saving is another clear benefit for all parties, both sellers and buyers. The seller is spared the expense of photocopying and storing large sets of documents, renting a large enough space, and further supervising the paper-based data room. Buyers don’t have to spend time and money traveling to the data room location. This helps shorten the time between the deal announcement and closure.
The security concern is greatly alleviated by data room solutions. The seller can set the access level to some of the documents as “read-only,” preventing any party from printing or even watching full-screen. Watermarking enables tracing documents if buyers do wish to save or forward them. Some documents can be set to self-destruct within a specified amount of time. Also, modern encryption protocols protect data when in rest and when in transit. In addition to that, hosting facilities are certified to the highest standard established for safeguarding financial industry data.
Virtual data room solutions have the following qualities that ensure their wide success and easy adoption:
– Quick implementation — most VDR solutions can be installed and populated with data within hours.
– Intuitive user interface — Accessible from all internet browsers and from any device, easy to use interface minimizes the learning curve for users who now can start scanning, uploading, and viewing instantly indexed documents immediately after user permissions have been set and invitations to the data room have been sent out.
– Up-to-date security — The seller’s team controls all security features of the data room solution, applying various degrees of user access and assigning these to any user or user group. End-to-end encryption ensures the security of sensitive documents while in storage or in transit.
– Secure hosting — most VDR solutions providers use hosting facilities that are compliant with the strictest standards for protecting financial data.
- Accurate search tools make it easy to locate necessary documents or data within the VDR.
- Real-time reports and audit trails present the complete picture to the seller, who can now see who is viewing which document and for how long.
- Value for all parties involved thanks to the scaling ability and maximized internal efficiencies.
Long gone are the days when physical data rooms limited the value of the deal by restricting the number of buyers who could conduct due diligence. Travel expenses and sheer travel time required to access the paper-based data room at the seller’s location further dwindled due diligence effectiveness. VDR solution brings all dealmakers numerous feasible benefits that a physical data room simply could not offer. This new level of efficiency helps investment experts keep their focus on due diligence and other crucial deal-related tasks and as a result, helps them make better decisions.