Finding investors for a business is quite a task. On the one hand, you need to present your company to its good advantage. On the other hand, you should ensure your sensitive information security during and after sharing it with all the potential partners.
You can successfully accomplish this mission when entrusting it to online data room software. It was initially invented to simplify due diligence procedures. The soft has undergone many improvements and now represents highly secure equipment that has enough capacities for any business transaction, fundraising included.
When your goal is to pick a reliable data room for interaction with prospective investors, visit https://dataroom-providers.org/data-room-pricing/ and find a detailed review of the top providers whose services include this option. You can also continue reading this article to get a better understanding of the software and its main components.
What Online Dataroom Software Is
Modern data rooms differ in their abilities, however, each of them can be defined as a set of instruments that serve to store and exchange important documents during various business transactions. These transactions include:
- Investment & Fundraising;
- Strategic partnerships;
- Mergers & Acquisitions;
- Licensing & legal audits;
- IPO (Initial Public Offering) operations;
- Transactions with intellectual property;
- Company’s leadership meetings, etc.
Virtual data rooms can help you to cope with such different and complicated processes because of their basic principles. They are as follows:
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Security is the priority
Online datarooms utilize Tier 1 data centers to store and back up data. They incorporate such security tools as 256-bit data encryption and offer multiple instruments to manually manage your VDR security.
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Functional variety
The software is not just a repository or file-sharing program. It allows preparing and conducting a transaction from the beginning to the end. At your disposal will be multiple document management instruments, access tools, analytics options, and many more.
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Adaptability to any business
You can choose a virtual data room with the exact storage size and as many tools as your investment transactions require.
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User-friendliness
Your VDR may have a powerful set of instruments with various functions. However, it should be easy to maintain. Most modern data rooms have improved customizable interfaces so that the user can easily get into how it all works. Moreover, providers tend to offer tutorials and round-the-clock support.
Why Use a VDR for an Investment Transaction?
An electronic data room is indispensable for fundraising operations if you plan them to be secure and fast. When you wish to bring in investments, you will have to convince your partners-to-be that your business is worth capital placement. Potential investors will want to check the financial, legal, and other aspects of your business. All this will require exchanging loads of documents. You can easily organize the whole process in the following way.
#1 Prepare Documentation
Investment transactions may require uploading specific documentation like articles of incorporation, financial accounts, business plans, recent board minutes, current projects, and many other papers. Your investors may inform you about the exact documents they would like to observe via a Q&A option.
Modern data room services include the Drag&Drop feature that will allow you to quickly upload all the necessary papers. You can organize the storage so that it will contain convenient folders and your partners will be able to find every paper they need in no time.
#2 Invite New Users
You can add as many guests as you wish to your VDR. You can set specific rules for signing in. Thus, you can apply two-factor authentication to prevent unauthorized access to your data room. You can also create your personal NDA, that is, a Non-Disclosure Agreement that each user will have to accept before they can log in.
Moreover, you can allow and manage access to your VDR from mobile gadgets. Its mobile version can be compact and support only necessary instruments, however, full versions are also available.
#3 Manage Access to Documentation
Most virtual data rooms have the option of multi-level access to your sensitive information. You can grant different permissions to different users so that your most competitive info remains intact and only shared among the stakeholders and other trusted people.
The documentation itself can be edited for the same purpose. To prevent illegal usage of your documents, you will have such tools at your disposal:
- Watermarking;
- View-only options;
- Redaction, and others.
This will help you to share sensitive information only when it is necessary and only with the right people.
#4 Monitor Users’ Activities
Your electronic data room should comprise analytical tools so that you can watch the users’ activities in it. Reports may include such data as IP addresses from which they enter the VDR, devices they use, the files they view, download, or print, etc. This will allow you to better understand your investors’ needs and react in a necessary way.
#5 Vote and Make Decisions
Modern datarooms have such options as E-Signature and Voting. That is, you can successfully complete your investment transaction via the VDR by signing agreements right in it.
What is the Best VDR Vendor for Investment Operations?
In most cases, you are the one who knows the answer to this question because no one knows your business better than you. To make the right choice, experts recommend avoiding half-baked decisions. The best way to pick a proper virtual data room provider will include the following steps:
- Know your goals and budgets;
- Define the tools necessary for your organization;
- Compare several providers and their data room services;
- When interested in any, do not hesitate to contact its support and ask for more details;
- Be reasonable when searching for an affordable price;
- Opt for providers that offer a Free Trial;
- Use a Free Trial to check the VDR;
- Purchase the VDR when it suits you.
So, the process is not that fast, however, this will be a well-spent time. The chosen online data room software will raise your business to a new level and will help you attract investments more quickly and in a more secure way.
