Virtual Data Rooms, also known as VDR, is a highly secure repository of information, which people use to share, review, and edit sensitive files and folders.
In the past, many businesses had a physical data room. Although these worked, there were often a lot of issues that occurred. Business owners worried about security. Even with constant surveillance, they would still worry that the confidential files stored in these traditional data rooms would fall into the wrong hands. Unlike VDRs, the person has to physically go to the room to access these files and folders stored in a physical data room. This is inconvenient and expensive for businesses. During the pandemic, a lot of people work from a remote location, so accessing a physical data room might not be possible, while VDRs allow employees to access the documents anytime, from any location in the world.
Business owners are in control of the VDR, so they can decide who can access the room, and what files and folders they are allowed to open. This helps increase businesses security, making confidential documents hard to access for those who have not been granted permission.
How can VDRs help you sell your Business?
Virtual Data Rooms are great for those wanting to share information safely online. If you are selling your business, you might want to share some of your confidential documents with the people who are purchasing your business, or people who are involved in the sale such as:
- Legal team: People who work at the law firm you deal with may need access to the files and folders stored in the VDR. They will want to see legal documents and projections. When selling a business, there is often a lot of paperwork to go through. Although it is possible to email each file to the legal team, it might take a very long time. Providing a VDR with all the information needed is a great way to share these files and folders.
- Assets Sales: A lot of companies want to sell assets that they have in their business. Allowing potential customers to access certain documents in the VDR is an easy and fast way of providing them with the information they need.
- Investors: If a company is looking for investors or they want to keep their current investors up to date about what is going on in the business, giving them access to the VDR will show the business’s progress.
Emailing has changed the way many people do business, but it does have its downfalls. When you are selling your business, sending highly secured files and folders by email is not the safest method of sharing these documents. Plus, it can be extremely time-consuming to send each document.
You must Find a VDR Provider
The first thing you must do before you start storing your documents or due diligence is finding a VDR provider. There are several VDR providers out there, but finding one that suits you, your business, your employees and the people who are going to purchase your business is vital.
With so many VDR providers available, take your time before you invest your money. Some VDR providers allow potential customers to try their service before they buy it. This is a great way to see if it is an ideal provider for your business without spending a penny. If you have an IT team, consider asking them for advice. Also, speak with the people who are buying your business. They might already be using a VDR that they are comfortable with.
When you have selected a VDR, you can start setting up the room and inviting whoever you want to access the room. Most VDRs will have a customer support team ready to take your calls. If you have any queries or you need training, don’t hesitate to ask them for help.
How do you Set Up a VDR?
Once you have your VDR up and running, you must create groups and add new users. On most VDRs, all you have to do is add a user’s email address to allow them access to the VDR. Once you have added their email address, they will receive an email from the VDR, and once they access it they will be able to provide the room with their other information. Once all their information is complete, they will be able to access the VDR whenever they like.
An administrator can set permissions in the VDR, plus, they can see all the users in the VDR. You can have several administrators if you like, which can prove extremely beneficial when you are selling your business. By setting the buyer of your business as an administrator, they will be in full control of the users they want to allow access to the VDR.
Setting Permissions
One of the big differences between physical data rooms and Virtual Data Rooms is that administrators can set permissions in a VDR. This allows administrators to change who has access to each file, it also allows them to change the VDRs protocols. For example, the administrators can decide whether or not users can “copy and paste” the files and folders stored in the room. It is up to the administrator whether or not users can take screenshots of the confidential documents.
Some VDRs allow administrators to add a watermark on certain files. This means that users can only view, download, print, or edit files with the watermark. Not all files need to have a watermark on them, just the high secure files and folders.
How Safe are VDRs?
In the modern world, we live in, cybercrime is a big issue that individuals and businesses face daily. Cybercriminals are constantly on the lookout for new targets, and they are well aware that most businesses have plenty of confidential files. These hackers often take these files from and hold businesses to ransom. Even when a business pays the ransom, they are not guaranteed that the hackers will send them their missing documents.
This is why VDRs have become so popular in the business world. Nearly every N&A deal uses VDRS and other cloud storage at some stage. As long as the VDR provider you have selected has the necessary security settings, you should have no issue.
However, in a lot of businesses, employees are told to run a VPN service while accessing the VDR. A VPN (Virtual Private Network) boosts the company’s security because it masks their employees original IP address, making it much harder for cybercriminals to gain access.
Conclusion
When selling your business, it’s probably best to avoid free cloud-based services. Although it won’t cost you a penny to run, many businesses have had problems, especially with storing financial and litigation files. If you are using Google Docs for example, if one of your employee’s accounts becomes compromised, there is a good chance a hacker can gain access to all your confidential files and folders. So investing in a reputable VDR should prove worthwhile. Some VDR providers have around the clock customer service, so if you have a problem, day or night, they should be able to rectify it.
