Today even the smallest and youngest of businesses are able to operate a streamlined efficiency level far beyond the companies of yesteryear. Or more aptly put the pre-internet era.
With the advent of the internet came giant leaps in technological advancements. The most important and influential as far as businesses are concerned is the invention of cloud computing.
Cloud computing has provided businesses with the ability to easily and conveniently improve productivity and efficiency. This is capable by providing the same IT services as before but in the form of software as a service (SaaS), infrastructure as a service (IaaS), and platform as a service (PaaS).
This means that instead of relying on physical equipment in an on-site location, businesses can outsource their IT needs to third-party companies. One of the SaaS that businesses can benefit from is a virtual data room.
Keep reading to learn everything you need to know about virtual data rooms.
What are Virtual Data Rooms?
Virtual Data Rooms are virtual versions of physical data rooms, which typically store all your company’s important files and data. Instead of taking up physical space requiring the need to rent storage space and buying equipment, virtual data rooms house your files on a third-party server.
The third-party company offers a service plan for a monthly or annual fee and stores your files and data for you. These files can then be accessed by employees or potential business partners from anywhere in the world. You control the access permissions, however.
When to Use a Virtual Data Room?
VDRs have replaced their physical counterparts for most financial transactions done by companies. This is because physical data rooms are costly and often cumbersome. Often requiring constant evaluations of required storage space and potential new locations to house your files.
VDRs can also be used in a variety of different scenarios for a variety of reasons.
For startups and larger corporations, fundraising can be a great way to raise capital. But, convincing investors to part with large amounts of their money can be difficult at best.
VDR offers a streamlined way of sharing information during the due diligence investigation. Being able to easily provide necessary documents and data upon request can ease investor’s minds.
When a company decides to go public there may suddenly a slew of new rules and regulations to follow. These are usually found at the local, state, and federal level.
Companies that go public also need to be more transparent with the public than they were before. After all, now they are investors as well. VDR provides an easy way to make available all necessary documents and data.
Nobody wants to be audited. But it is a fact of life. Your company will be audited at some point. And the best thing to do is make the process as smooth as possible for all involved. VDR allows this to be possible by granting permissions to the auditor for the files he or she needs.
Finding a Provider
There are a plethora of VDR providers out there. However, not all VDR providers are the same. Meaning not just any VDR provider will be able to meet the needs of your company and budget.
When it comes to providers you’ll need to have an idea of what you’re working with for a budget as well as what specific features you require. A big concern for companies making the switch to a VDR, for example, is security.
Make sure that the provider you choose is able to offer the security you are required. For example, if your files contain personal information on clients, find a provider that complies with all mandatory laws and regulations for the safeguarding of clients’ and customers’ personal information.
Make Change to the Virtual World
A virtual data room offers companies some peace of mind knowing all their important files and data is protected in cloud computing servers maintained by experts. VDR also helps to make things like fundraising, going public, and being audited as easy and as streamlined as possible.
While VDR is a great service for any company of any size, not every provider will work for your needs. Be sure to find a provider that will meet all of your business needs while staying in your budget.
There certainly seems to be less and less reason for businesses to have physical data rooms and more reason to turn to the virtual.