Virtual Data Rooms Explained with Use Cases

The online data room constitutes a product of combining elements of a web content management system and a document management system. The software makes it possible to differentiate rights and access to data within the system. Besides, the platform assists in creating a clear structure and establishing a convenient exchange and work with files.

The Online Data Room Pros

Internet data reservoirs offer a highly effective tool for any firm that strives for thriving, simplifying the procedure of sending files. People with the requirements below will be ideal VDR customers:

    • mobile gadget support options;
    • trustworthy sending of essential materials and other vital business data;
    • fine search option;
    • the enterprise data protection;
    • simultaneous entrance to various parties;
    • official permission to upload large amounts of material.

The Platform Users

It is customary to single out the following software customers:

Startups

When startup organizers speak to potential investors, these platforms assist them in analyzing interest. The portals allow them to figure out which investors spend the time looking at specific organization data and period they spend in the software to have a good understanding of ‚Äč‚Äčtheir concernment.‍

Corporate Development

Enterprises should look for methods to operate with the documents. The software is indispensable in this procedure since it helps organizations to define trends in large documents that may have gone unseen.

Technology

There is no stronger advantage for using these programs than the technology area. The platforms help the largest technology companies to send documents across teams around the world to help spread information within enterprises.

Other Software Users

These portals are also popular with people in the following spheres:

      • investment banking;
      • venture capital;
      • legit industry;
      • business agents;
      • immovable property;
      • ‍risk capital, etc.

Why Use Network Data Room Software?

In today’s business world, the one thing that all companies have in common is the need for high-quality information. Lots of modern enterprises put to use the online data rooms for the following reasons.

Fundraising

With this platform, business enterprises can share sensitive data with potential investors when raising funds. These investors will then be able to access the private material, ask necessary questions, and upload their data.

Communication with the Board of Directors

Teams can securely negotiate with each other in electronic data rooms on various topics of the deal lifecycle. Besides, they can secretly invite external users to chat in the room.

Business Consultations

It’s vital to note that confidentiality and privacy are key factors for consulting businesses that need a good business environment, Here, the platforms handle this aspect pretty easily.‍

Mergers and Acquisitions

Online data rooms are in demand in the course of the M&A due diligence phase. The thing is that it’s a reservoir to keep and send lots of materials to various companies such as potential purchasers and sellers.

Strategic Partnership

Prospective business partners can put to use data rooms to provide access to essential data and materials about each other. More than that, they can set certain permissions to know who possesses access to the needed information.

Secure Data Sending

Network data rooms are used to keep an unlimited amount of various materials, including lots of different data types, namely: documents, audio files, presentations, and all that jazz.‍

Production

Manufacturing spheres make use of such platforms to share up-to-date developments and product information.

Why Choose a Data Room over Dropbox?

Lots of business people wonder why pay for a virtual data room when they can use Dropbox for free. To answer this question below you can see a comparison between Dropbox and the online Data Room to understand “why”.

What Does the Dropbox System Imply?

Dropbox constitutes a cloud storage system for folders or files that allows you to save space on your computer’s hard drive. What matters here is that the developers of the service position it as “the world’s first smart workspace”. Let’s look at its drawbacks.

Limited Number of Devices

The undeniable advantage of Dropbox was its versatility. Plus, Dropbox is compatible with a bunch of online services and mobile apps. An update to Dropbox’s terms of service removed that benefit. What’s the point of having clients for all platforms if you have to pay to use them? Fortunately, other popular cloud storage services have not yet reached the same degree of “enlightenment” as Dropbox. Therefore, they do not limit the number of connected devices.

Small Amount of Free Space

A free Dropbox account provides only 2 GB of cloud space. With the help of several tricky manipulations (sending referral links, inviting friends, connecting mobile applications), you can increase the amount of free space, but all this requires extra steps.

Unfavorable Tariff Plan

Dropbox is not the most profitable thing, even if you decide to pay. For $99/year, you get 1TB of cloud space (and remove the limit of three connected devices). It’s a little expensive, and it’s not a fact that you need a whole terabyte.

Lack of Synchronization for Arbitrary Folders

You can sync to your Dropbox cloud-only those files and folders that are placed in the Dropbox directory. You can’t back up your Documents. So, you can use a special application, but it’s still difficult.

Lack of Control over Your Data

This applies not only to Dropbox. All existing cloud storages have the same problem. By using them, you entrust your data to third parties. Even without going into empty talk about evil hackers and government agents, the data does not belong to you.

Network Data Room Specialties

The Virtual Data Room is the product of combining elements of a web content management system and a document management system. It is a repository of certain confidential corporate documents in electronic form and with a clear structure. It usually exists in the form of a website. A distinctive feature of the platform is the principle of a fireproof safe, namely: an increased level of protection for access and data transmission to external users and their physical safety.

This online portal is used as a tool for:

  • due diligence of corporate transactions (mergers and acquisitions, bankruptcy and collapse, loan syndication, real estate sales, etc.);
  • audit and compliance (compliance control);
  • confidential business communications, when it is necessary to provide access to a single source of information to several users from any geographical point. Access to viewing (downloading) documents can occur only after appropriate authorization (often two-factor) from the portal.

As a rule, organizations providing access to data rooms require an international certification for the storage and processing of confidential data ISO 27000 (ISO27001).

Why Do You Need an Online Room?

By creating a virtual room, you will receive:

  • the ability to quickly conduct planning and meetings: do not waste time organizing conferences, create a virtual room once and use it when you need it;
  • 24/7 access to the virtual room: your partners and customers will be able to connect to it regardless of location and time of day;
  • saving time and money on the equipment of a real meeting room in the office.

Why Do Lawyers Love Working on a Virtual Data Room?

Most of the time lawyers spend on routine. In some cases, it takes up to five hours a day to complete contracts, issue invoices, manage work hours, and adjust schedules to meet deadlines. To improve the working capacity of employees, a competent organization of work is required. An electronic data room for a law company will help with it.

Online Data Room Benefits for Lawyers

Online data reservoirs can save lawyers a great deal of time that might be wasted looking through tons of documents. With this software, law enforcement officers spend a few minutes on work that would take several days using other methods. In other words, instead of boring filing cabinets and manually sorting papers in search of important information, this program makes it easier to access the virtual files.

Moreover, lawyers will very much need a “search function” in the network data room platform. This option ensures that no data or evidence is left out when searching through different files. The use of a similar platform for law organizations provides its clients with an opportunity for better cooperation between law people as most legit cases need a team of lawyers to resolve the issue.

Legal representatives of the firm may be located in other cities or even countries. Accordingly, they can get access to case files or strategic notes much faster.

Other Essential Platform Advantages

It is common knowledge that many lawyers have to work overtime as they need to perform various tasks. Using a data room offers unlimited access to important materials at any time of the day, including situations when they are far away from the office. Most importantly, this system provides 100% legal privacy for customers, especially when sharing large documents.

It makes it easy to send information to business clients, cooperating lawyers, and opposing lawyers at the touch of a button. Besides, the portal clients are guaranteed trusted access to documents in remote locations. So, there is no need in hiring couriers, which can be costly as well as time-consuming.

This service is suitable as a communication tool as it provides the information security necessary to keep customer information private. The platform features secure 256-bit encryption, audit trail capabilities, and a high-availability infrastructure. The platform ensures that confidential data never falls into the third party’s hands.

Modern law companies are free to put to use online data spaces for restructuring and bankruptcy objectives. The systems assist in organizing files into multiple sets within a project to control file access and improve functionality. It also allows creating additional premises for transactions for the purchase and sale of assets, raising additional capital, or closing financing.

With the help of the program, you can quickly find out the status of work in progress. In this way, lawyers can easily keep track of data they have already observed and those that are still pending. The use of technology obviously negates this unnecessary stress. The online data room has reduced constant face-to-face communication to a minimum in the interests of productivity and time saving moments.