It is important to protect your company’s data from cyber attacks during business transactions. Virtual data rooms are used by businesses for transactions such as mergers and acquisitions or fundraising transactions to share documents with multiple stakeholders both within and outside of the company.
For example, during the due diligence phase of the merger or acquisition the parties involved need access to a large amount of confidential documents. These business transactions can be handled with a VDR which allows interested parties to review and scrutinize documents without having to physically travel to the location where the documents are located or have to manually sort large documents on paper. A VDR also removes the requirement to print documents, which saves money.
A VDR is also a perfect way to solicit capital from investors who are interested in investing. When they raise capital, tech startups provide detailed revenue forecasts, IP ownership documents, and financial records into their data room to be seen by prospective investors. This helps investors conduct thorough research and makes them feel more confident about investing in the company.
To safeguard business data businesses should use their VDR regularly to determine who has viewed which documents and when. They should also ensure that they have encrypted the sensitive files in the dataroom and set specific access permissions to ensure only authorized users can download or edit documents. Watermarks that can be customized can help to lower the chance of stealing documents or unauthorized sharing.