Selecting a Virtual Data Room (VDR) and Data Security
As a substitute for the traditional physical data room, virtual deal rooms have become the standard software for sharing sensitive information. These platforms are often utilized to facilitate due diligence in mergers and acquisitions, fundraising, and IPOs among other business transactions. However, the success of this industry relies on the implementation of safe online protocols. Cyber-attacks and data breaches can ruin a company’s reputation as well as their relationships with investors and customers.
One of the most important factors to consider when selecting the right VDR is its security features. Look for a platform that has granular permission settings with multiple layers of authentication (e.g. two-factor authentication, single sign-on), and IP restriction to safeguard your private documents from unauthorized devices. Idealerweise, the VDR could also incorporate digital rights management policies (DRM) that could be applied to specific files. This prevents unauthorized users copying and downloading data.
Go to the security page on their websites before looking at VDRs. This will give you an idea of how seriously the business takes security. It should also let you know if they have an entire team dedicated to this purpose.
Another thing to think about is whether or the VDR can be used to create separate workspaces for various projects. This feature is crucial to ensure that projects do not overlap or divulging confidential information. It is also crucial to ensure that different projects have clear names so they can be distinguished from one another in the VDR.