Apps & Software

6 Compelling Reasons Why You Should Move Towards Virtual Data Rooms

Most companies that often share data with potential clients or organizations are increasingly finding virtual data rooms a necessity. A virtual data room is what makes storing, sharing and securing data easier for businesses and investments alike.

Virtual data rooms have been getting a lot more popular lately because they help in the process of negotiations during mergers and acquisitions, navigating board communications, and secure data sharing.

In this article, we have an in-depth look at what a virtual data room and why you should consider it for your business.

What is a Virtual Data Room?

A virtual data room (VDR) is like a digital file cabinet that provides businesses with a secure, online environment to store, and share data. It is also termed as ‘deal room’ since a lot of dealings regarding businesses and investments happen here.

Most companies use virtual data rooms to store and share confidential files that are usually used for financial transactions. The data that is typically stored in a virtual data room includes mostly critical and delicate files that are very high in value to the company. The data could be legal, tax, or financial information of the company.

Virtual data rooms allow you to store information in a well-organized and accessible manner to prevent potential catastrophes and damage.

6 Reasons Why You Need a Virtual Data Room

Here are 6 compelling reasons why you should move towards virtual data rooms.

  1. Cost-efficient

Virtual data rooms are known to be cost-efficient when compared to physical data rooms. What makes virtual data rooms inexpensive is the fact that you won’t need any physical location and materials such as papers, printers, inks, staplers, photocopy machines, folders, and file cabinets for your business.

You also won’t need a bigger room for storing data since all of them can easily be stored in the digital world. Also, unlike physical files, you won’t need to invest too much in the protection of digital files because simple software can easily secure the files in a virtual data room.

This makes VDRs especially useful for small businesses that are just starting. Potential buyers can also save a lot since they don’t need to travel to the physical data room to access the data.

  1. A More Secure Way of Sharing Data

With the use of a virtual data room, business owners, employees, and clients can securely share important data without having to worry too much about a data breach. As aforementioned, a virtual data room can only be accessed by people with the right access. This helps to keep the data safe from hackers.

Permission level is also a neat feature of VDRs since not everyone should have access to all the files. With this feature, you can limit the access of some people so that only those with the right level of access can view or edit the files. Besides, there is an added layer of protection that prevents some users from copying, pasting, or taking a screenshot of the files.

  1. Secure Storage of Data

A data breach is more common in companies that do not use VDRs. With a VDR, you can easily store important and sensitive files, like medical information of your staff, contracts, intellectual property information, documentations, reports, and everything crucial to the company.

You will no longer need physical equipment or paraphernalia to keep your files. Thus, you will keep your data safe while saving money in the process.

  1. Better Workflow

Workflow inside the company can greatly be increased with the help of a VDR. Since all the data can easily be access between staff, the work can be done a lot faster than normal. Distance is no longer an issue between your staff because all the information they need is available online.

For this reason, virtual storage of data can greatly contribute to making the workflow of the company smooth and convenient. With the increased workflow of the company, productivity will undoubtedly increase as well.

  1. Transparency with Investors and Lenders

Information transparency and accountability are some of the factors that lenders and investors lookout for from a particular client. Investors or lenders can be quite hard to persuade if you lack the necessary documents that they need for the transaction to be fruitful.

With a VDR, you can clearly display all the pertinent information that your investor or lender may need. Additionally, the information can be accessed anywhere by investors from around the world. Time is very valuable to a business and with a VDR at your disposal, you can make any transactions with the lenders and investors faster and easier to finish.

  1. Quicker Due Diligence

Due diligence is expected when using a VDR for the company. For instance, if you are navigating a merger or acquisition, a VDR can help you engage the potential parties in negotiations without putting your business at risk.

You can allow the buyers to safely view the confidential information and quickly terminate their access if the deal doesn’t close. Any information that is edited, deleted, or added will all be logged so that you will know who has accessed the file.

Any type of legal process that requires proof can easily be handled with the help of the log files that you can obtain from the VDR. Also, multiple buyers can access the information quickly in the virtual data room. This helps to ensure faster due diligence.


While virtual data rooms are optional when running a company or a business, there is no denying that they make quite a difference in the operation of a business. Not only does it provide a way to make running a company or business more convenient, but it also protects you from catastrophic events such as data breaches and emergencies that could result in losing all your physical files.

VDRs are easy to set up and you just need to find the right one for your needs. Once it is ready, you can then add anyone that requires access to the files. When adding people to your VDR, always be sure to limit their permission level so that they can only access what they need.