A business solution that can solve multiple problems is what every business desires. Not every organization has the luxury of “enough funds” for everything. However, a virtual data room can be a solution for various business problems. For example, businesses can use data room software for file sharing, data storage, online meetings, deal executions, auditing, and communication. Yes, you can use a VDR for all these purposes.
Learn more here how you can use online data room software.
5 ways to use virtual data rooms
An electronic data room can be used for;
1 – Data storage
Originally, data rooms were created as online data repositories, allowing business to store their documents in one place. It is important to mention that an electronic data room is a centralized data storage place where you can store any type of data in any recognized data format.
The term “centralized” means all your business data will be available on one platform; you don’t need separate databases for different sections. Your employees or business teams can access their required documents from your VDR.
In addition to that, vdr software makes data sharing convenient and faster. A data room user can share files with one or multiple users, edit or annotate documents (depending on access permission settings), create live document links, and allow multiple users to work on the same document. Apart from that, a file owner or VDR administration has the right to revoke document access anytime.
2 – Online communication
Do you know that virtual data rooms are one of the safest communication channels? Emails were considered as the most secure communication channels in the past, but hundreds of email scams were a question mark on service providers’ credibility.
Online data room software makes sure that you, your employees, or business teams can communicate without any fear. Apart from storing and sharing documents, data room users can communicate via different routes.
For example, VDRs facilitate one-to-one communication through instant messaging services. Users can create chat groups/rooms, create polls, hold online meetings, and even cast online votes. Many virtual data room providers allow third-party integration (in case you don’t want to use built-in communication tools).
Audio/video conferencing tools are super effective for remote team meetings, meetings with investors or stakeholders, and online board meetings. Many VDRs have HD audio/video meeting tools.
3 – Due diligence
Virtual data rooms are unsung heroes when it comes to due diligence in initial public offerings (IPOs), fundraising, mergers & acquisitions, and commercial real estate asset sale/purchase. Due diligence is the most crucial step in these types of business transactions, and this is a stage where delayed data access can cause unsuccessful endings.
Due diligence is a complex process in which acquiring companies or investors verify and analyze the target company’s business data. Target companies often hesitate to share their confidential documents, including their trade secrets, product designs, marketing plans, etc. This creates a situation of uncertainty on both sides.
Online data rooms help target companies share their sensitive data with complete control. Target companies can add numerous buyers to the VDR, upload all necessary documents in an organized way, and provide customized access to different buyers according to their needs.
Similarly, buyers and target companies can communicate within virtual data rooms. Buyers can ask questions in live Q&A sessions and get answers immediately. They can add notes to documents and ask for explanations. Both parties can also arrange audio or video meetings and sign agreements within the VDR.
4 – Business deals
Businesses can use electronic data room software for closing business deals online. For example, real estate firms use VDRs for commercial real estate asset sale/purchase. Realtors can add investors and sellers to the data rooms and allow them to communicate freely. Meanwhile, realtors can collect and verify all necessary documents, prepare contracts/agreements, and even arrange video tours of the concerned assets.
Similarly, fundraisers can attract investors by making business data public with the help of virtual data rooms. Data room administrators can control the data flow and prevent data leaks using VDR security features.
5 – Secure data presentation
VDRs are very common in pharmaceutical and R&D companies for presenting data to investors. For example, if a pharmaceutical company wants to attract investors for a new prototype or formula, it has to present all confidential details in front of them.
These scenarios increase the chances of data theft, and a pharma company may lose its competitive edge. Thankfully, online data room software can help present data in the safest manner. NDAs, document access revocation, “fence view” mode, etc., prevent unauthorized copying of documents.
Top 5 virtual data room vendors
As a bonus, here are some of the best virtual data room providers in 2022
Virtual data rooms are multi-functional business software commonly used for data sharing and management, online business communication, deal management, due diligence, and data presentation. Most importantly, they are suitable for any type of business.