The title must have caught your attention and that is why you are here to learn what exactly Virtual Data Room is. If you are a person who is looking for the security of documents and wish to avoid any data leakage make sure to suck as much information as you can.
This article is all about Virtual Data Rooms, how it has brought a drastic change in the online world, why it is important for business and finance and how entrepreneurs can make the best use of Virtual Data Room to grow their fundraising.
Let us begin by a quick study of traditional data rooms –
Traditional or Physical Data Rooms
Before the introduction of the digital virtual data room, the company’s members have to be present in a physical room to discuss and share sensitive information about the company.
Meaning – all the business deals such as auditing, mergers & acquisitions, share sales, etc. were performed in a room that is kept under surveillance. The logs were maintained of – who access what specific documents. So, to view the logs people have to be physically present in the room.
The problems that the traditional data room faced were an inconvenience, data leakage, and additional cost if rooms have to be booked prior to meetings. There is no doubt in saying that people still are taking this approach for business meetings.
However, as companies are expanding their business globally they need a more convenient option than physical data room for better security and to save money, time and effort.
Luckily, this is where the Virtual Data Room comes into play. Here is everything you need to grasp about Virtual Data Room.
Virtual Data Room
Virtual Data Room is also known as VDR or Deal Room. It is an online repository of data and information that is used to distribute and store confidential documents.
Virtual Data Room is mainly used to ease the due diligence process that takes place in different events. These events include merger & acquisition transactions, private equity, and venture capital transactions.
The due diligence process undoubtedly can be held in a Physical Data Room, but to facilitate the process VDR has replaced the Physical Data Room for obvious reasons.
What is in a Data Room?
The Virtual Data Room helps companies to store private and confidential documents related to the company. But of course, VDR is not limited to store documents related to a tax matter, finance records or other legal records, it is flexible enough to store such confidential data that can be retained but be in a high-security location.
Documents such as trade secrets, personal files of employees, copyrighted work or files related to intellectual property demand a high amount of security, and VDR is the best option for a company to safeguard those documents.
Besides storing confidential documents, Virtual Data Room also helps in sharing those documents to selected authorities, so there is no chance of data leakage because accessing those documents will require various go through procedures.
Let us now learn about – what is the scope of VDR in the future, but before that have a look at VDR Market size. The Virtual Data Room is divided into various segments like component, function, end-user industry, enterprise size, deployment model, and geography.
VDR Market by component –
1: Software
2: Service – Managed Service, Professional Service
VDR by function –
1: Finance
2: Marketing and Sales
3: Workforce Management
4: Compliance and legal
VDR by end-user industry –
1: Government
2: Healthcare
3: E-commerce and Retail
4: IT & Telecommunication
5: Media
VDR by enterprise size –
1: Small
2: Medium
3: Large
VDR by deployment model –
1: Cloud
2: On-premise
VDR by geography –
1: South America
Brazil
Argentina
Others
2: North America
Canada
Mexico
Others
3: Middle East and Africa
UAE
Israel
Saudi Arabia
Others
4: Europe
France
Germany
Italy
Others
5: Asia Pacific
India
Australia
Japan
China
Others
Virtual Data Room scope in future
In 2017, Virtual Data Room Market valued at $521.103 million USD, and by 2023, it is estimated that the value of VDR Market size will grow up to $1383.863 million USD.
This data analysis is giving us a direct answer to – what is the scope of VDR.
It is quite clear that as the IT industry will grow, the features in Virtual Data Room will also grow for the users. The ultimate result will be increased marketing and sales, plus business deals and other legal work will be completed much faster.
As the article is coming to an end it is getting more exciting to discuss how VDR is beneficial for entrepreneurs. So without further ado let us read some crucial information that entrepreneurs should keep in mind before entering into the business field.
Virtual Data Room for entrepreneurs
For a start-up, you need people who can invest in your company, and in that case, you have to share the company’s documents which are highly confidential in nature. Though both the parties may share integrity, sometimes due to mishap leakage of data is common in Physical Data Room.
So as an entrepreneur you are highly recommended to use VDR as an option to close your business deals. Here are the benefits that you can enjoy using the Virtual Data Room.
Benefits –
1: VDR allows to protect your intellectual property
Virtual Data Room allows you to have total control on your IP protection. How? You can keep records of who is viewing your documents, moreover, you can mandate who can view and forward the data.
2: VDR is globally accessible
Regardless of geographical location and time, the Virtual Data Room can be accessed from any part of the world. You just need internet service and a phone or computer.
3: Easy navigation system
Virtual Data Room allows better organization of files as it has various filter options.
4: Data Recovery
As Virtual Data Room can duplicate your files and a backup, you don’t have to worry if your data gets crashed.
5: No space limits
Unlike Physical Data Room, VDR allows you multiple visitors at once for closing important business deals.
NOTE: The benefits mentioned above are not limited to only entrepreneurs, an already established company who wishes to expand can also have the benefits of Virtual Data Room.
Final Words
Hope you learned something new and interesting feature available to us. Virtual Data Room can make the company’s data more secure and easily accessible to the second party. Moreover, VDR can save additional costs and time. It is really an important online digital system for those who are planning for a start-up.