Do you have a business that’s in the process of being investigated by another company or organization? If so, you might be wondering what you can do to keep your confidential information secure. We have an answer for you: data rooms.
Virtual data rooms, or VDRs, allow you to keep your information secure while also allowing you to share needed documentation with those who need to see it. Let’s take a closer look at five times data rooms are a must for your business.
1. When You’re Looking for Investors
If you’re looking to find investors for your business, you should consider implementing an investor data room. It will allow you to securely share sensitive and confidential information about your company with people who need to access it.
When you deal with investors, keep in mind that dozens or even hundreds of people may be involved in the transaction. This means that many people will need to view thousands of pages of information about your company. This could pose a big threat of your data being shared or leaked. Virtual data rooms ensure that your documents can’t be edited, copied, or shared without permission.
2. When Merging with Another Company
Data rooms play an integral role in company mergers. If you’re looking to partner with another company, that company is going to want to learn as much as possible about your business to make sure it’s a sound financial decision.
Some of the documents you’ll generally need to provide include financial statements, a capitalization table, contracts, documents about intellectual property, profit and loss statements, and client data. All of these documents are confidential information that you wouldn’t want to be leaked. Sharing them in a data room ensures that no one will tamper with them or print out important documents, such as client data. If the deal fell through, the worst outcome would be the other company gaining access to your clients.
3. When Another Company Wants to Acquire Your Business
Just like with a merger or partnership, acquisitions are another situation where virtual data rooms are a must. Selling your business to another company requires you to share a lot of important documents. Again, this means many eyes will be on important financial statements, employee information, client lists, and other sensitive materials.
A virtual data room ensures that your info will be safe from being shared, edited, or printed without your permission. This is very important when it comes to selling a business — especially when it comes to sharing client data. Like with mergers, the last thing you want is for the deal to fall through and lose all of your clients.
4. When Working On A Joint Project
Another instance where data rooms are an ideal solution is when you’re working on a joint project with another company. This might happen when you’re developing a new product or service. Using data rooms ensures that all parties or contractors involved in the project or venture are able to easily share data without risking any confidential info getting leaked.
5. When Being Audited
If you’ve done any sort of fundraising, at some point, you might need to be audited by an organization outside of your company. Data rooms allow you to share financial records and any other proof an auditor would need to see regarding your fundraising efforts. This allows you to keep your confidential information safe while also still providing the proof and evidence required for an audit.
These are just five times data rooms are a must for your business. Using these virtual spaces to share your documents with people who need to access them is a great way to ensure sensitive information stays safe.
