When a company needs to share sensitive documents with external parties for high-stakes business transactions they require a simple method of sharing without putting themselves in danger of a data breach or committing a compliancy breach. In these cases, virtual data rooms can help you with all your needs for sharing documents.
A data room is a secure virtual location where you can store and organize documents to be used by authorized people in a high-risk business transaction like an M&A, IPO, or fundraising round. These rooms are also useful in a variety of other scenarios where your documents require additional security from other users for instance, court proceedings or collaboration on projects.
There are many file-sharing applications which offer security features. However, a data room is more useful and gives investors a professional impression. Look for a company that can provide customizable user permission settings and auditing capabilities, as well as watermarking and short messaging options.
Investors check out the data room of a startup to gather information that will help them make informed decisions regarding investing in the company. The organization of your data in a manner that is easy to navigate and including all necessary documentation will speed up the due diligence process, making it more likely that potential investors will move forward with the investment.
Startups may be enticed by free online storage and file-sharing tools. However they aren’t designed to meet the security needs of business data. To avoid this, it’s best to choose the right data room certified by industry experts in security of information. Datasite, RR Donnelley and Intralinks are some of the most reputable data room providers.