In the past years, paper-based processes have quickly migrated into digital form and brought online. As businesses grow bigger in scale and operations, the workflow must also follow suit. Simply storing files in hundreds of hard drives or drawers won’t be feasible in this day and age. Here comes the virtual data room.
All of a business’ information needs to be well-organized, accessible, and easy to access by administrators. To help with the sharing and distributing of sensitive business files or documents, most companies are utilizing a virtual data room. Let’s look at what exactly a virtual data room is and what advantages can it provide for startups.
What is a Virtual Data Room?
Simply put, a virtual data room is a huge online database that is used for storing a company’s sensitive and confidential information in a secure yet easily accessible manner. The company can then share their information conveniently with other parties whenever they need to.
With almost everything going digital in our age, it is quite reasonable to join the bandwagon. A properly managed virtual data room will help ensure that every piece of information is accurate and nothing gets passed without confirmation. Today, virtual data rooms are commonly used to share confidential information such as intellectual properties, case files for litigation, financial documentations, among many others.
Having the right qualified people only have access to the data all ensures that no serious damage can happen to the sensitive information. They could even stop potential catastrophes from happening before actual damage is done to the company.
Aside from protecting your company information from unwanted hands, a virtual data room will help you make crucial business decisions more accurately due to improved data collection and storing.
Virtual Data Rooms Vs Normal Cloud Storage Services
If you only look at the simple definition of virtual data rooms, it may sound exactly like a cloud storage service. Even though they have similarities, virtual data rooms are fundamentally different from cloud storage.
One of these major differences includes access to user logs, far superior security protocols, features for future collaborations, and detailed access controls. Virtual rooms have been a staple when it comes to important transactions such as acquisitions and mergers.
A virtual data room will have administrators that can view all the activity that happens within it.
Why Do You need a Virtual Data Room?
Security of data is paramount. There are numerous benefits a virtual data room can bring to a startup company. However, we want to highlight the main one; state of the art security. In today’s business climate, especially online, data is the king of everything.
The more data you have, the more power you’ll have. You want to protect your data from unwanted outside forces as much as possible. This is where the virtual data room excels, protecting your business’ confidential information.
The information that you may not want third parties having constant access may include legal documents, HR information, financial documents, and also intellectual property. With the assistance of a virtual data room, you can easily track and audit the activity of each of these documents.
You can even create specific rules in the virtual data room that will ensure efficient and secure data sharing. You can allow access to only for approved users and so much more.
You need data to successfully stand out among the sea of startups and especially against giant, already established firms. To use this data as a competitive advantage, you need it safe and hidden from your competitors. Not sharing this information will help you gain the upper hand and increase the chances of making a change in the market with your ideas.
Other Key Benefits of Utilising a Virtual Data Room for Startups
Now that we’ve outlined the main key benefits of a virtual data room for startups – which are excellent security solutions, let’s look at the other benefits that virtual data rooms have to offer.
Low Costs
Running a startup is one of the most challenging and stressful things you can do. In the delicate and early stage of the growth phase, you will want maximum productivity and efficiency.
You’re not going to have the extra money nor time to spend on activities that aren’t essential for business. Everything must go back to the company as an investment of some sort.
One of the best low cost and high return investments you can make is getting a virtual data room. Having to maintain copies of important documents using a physical data room is a huge expense that most startups won’t be able to afford.
Virtual data rooms pretty much eliminate all the problems that come with physical data rooms, including having to rent transport and storage for documents.
Convenient Access
One of the biggest downsides of a physical data room is that information gets bound to one location, sometimes permanently. As a startup, you will want optimal flexibility and agility of your documents; especially if your company deals with global employees or clients with different time zones.
A virtual data room will eliminate all of these problems by being accessible to anyone with an internet connection and the appropriate access level of the data. In short, a virtual data room greatly improves the options available for your startup company and even increase its long-term survivability.
Improves Business Decision Making
Having all the necessary information you need at reach will ensure that your company can react to any circumstances thrown at it with speed and efficiency. A virtual data room will allow partners or employees to access the documents needed, review, and edit as soon as possible whenever they need to.