A virtual data room provides an environment that is secure for sharing documents and files during due diligence, M&A, fundraising, IP protection and other initiatives. The effectiveness of the VDR is dependent on how it is set-up and used. This article will offer tips for preparing a virtual room to ensure it is as effective as it can be.
VDR preparation usually starts with scanning physical documents into digital formats and arranging them into logical folders utilizing clear naming conventions. A folder for a particular deal could be called “due diligence” and tagged with the deal’s name. After all files have been uploaded into the virtual data room by the project administrator, permission settings can be set. These settings can be altered to ensure that only certain files, folders, or user groups can have access. They can be restricted to a particular date and time or removed remotely in order to manage digital rights. A virtual data room will also automatically index the files uploaded which makes it easier for users to browse the document repository.
When planning a project the most important factor to consider is security. Unintentional behavior is the reason for 64% of insider data breaches which is why it’s vital to take preventative measures. With the “security emulation” feature, a lot of providers allow users to view the dataroom from the eyes and perspective of another user. This reduces the risk of internal theft. Most solutions provide a range of tools to encrypt documents and spreadsheets, add watermarks, apply branding features, and much more.