Amazing Use Cases for Secure Virtual Data Rooms
Know 5 amazing use cases for secure virtual data rooms; While this trend seems to be driven largely by aesthetics, there is a deeper reason behind this fascination with all things soft.
Did you know that the virtual data room industry has been amongst the fastest-growing business sectors in the last five years? The global electronic data room market was valued at $1.3 billion in 2018 and is expected to hit $3.63 billion in 2026.
Not many people in the business sectors knew about virtual data rooms a decade ago, but now data room software is an integral element in all business types and sizes. So how did this unbelievable growth happen?
The surge in data room usage was triggered by the growing rate of cybercrimes and more and more businesses going online. However, digitalization also paved the way for hackers and cybercriminals. As a result, businesses started looking for reliable and secure online communication and data storage platforms. This is where online data room software came to a revolutionary rescue
Although virtual data room software is now used by professionals, government agencies, and all types of businesses; here are the top 5 amazing use cases for secure virtual data rooms.
most common use cases of online data room software
1 — Mergers and acquisitions
Mergers and acquisitions are indeed the biggest business transactions, and 2021 saw more than 450 massive-scale M&As. It is imperative when one business tries to acquire another; it goes deeper into the company’s roots.
In other words, acquiring companies intend to know about the target company as much as possible. For that reason, the acquirer demands a comprehensive analysis and verification of financial and business records.
How does a virtual data room help?
Companies use a virtual data room for due diligence in mergers and acquisitions. Essentially centralized data repositories, the data rooms, where companies store all their data for due diligence.
A centralized data storage allows the acquiring company to access any document from a single place. As a result, the project management teams from both sides can communicate in virtual data rooms; and the target company can easily protect its confidential data from being misused. In addition, both parties can track the deal’s progress and sign documents online.
M&As are also the biggest use case of data room software — and DealRoom, iDeals, and Merrill are some of the most famous data room vendors for M&As.
2 — Fundraising, Initial Public Offerings (IPOs)
Virtual data rooms are ideal solutions for fundraising. Fundraising takes time, and fundraisers have to take care of the company’s confidential information. When a company goes public or starts an IPO, it has to be an open book for investors.
Investors can rightfully demand copies or access to the company’s strategic plans, business objectives, and other important details before investing.