Virtual Data Room Software: The Key to Secure and Effective Data Sharing

With the advent of the Internet, companies began to move their business into the digital space because this gives them more opportunities to access and share information with their employees, customers, or potential partners. However, not all online platforms are suitable for business use. This inexperience and negligence are taken advantage of by hackers, and the result is a data breach. To ensure that such a scenario does not affect you, use only professional equipment to store and share sensitive data – a virtual data room.

Basic description of a virtual data room

Virtual data rooms have become a significant figure in modern business operations. For example, the program became a lifeboat during a global pandemic when the physical presence of multiple people in the same room was unacceptable. VDR allows businesses to maintain high productivity remotely, exchanging sensitive data in a secure space and concluding complex transactions there. Companies of all sizes and industries can use the data room to their advantage because the solution has all the security and data management measures needed to conduct due diligence, mergers and acquisitions, fundraising, IPOs, financial audits, and more. With VDR, you can significantly improve the efficiency of your work and conduct business processes several times faster and easier.

Characteristics and Benefits of VDRs

As mentioned earlier, virtual data rooms can suit organizations of all sizes and industries, so each VDR provider’s feature set differs depending on their industry. But there is something that remains the same about any quality data room because the main parameter of each one is secure storage and efficient data sharing. So, the main benefits of VDRs are:

  • Security features

Internet data security is a valuable feature a business solution provider can have. In the vastness of the Internet, cyber attacks and data breaches can cause a company irreparable damage, loss of funds, customers, and reputation. But VDRs minimize threat risks because they are certified solutions and offer advanced security technology. The most common security features of VDRs are data encryption, dual authentication, digital watermarks, and explicit role-based access permissions. The latter is quite flexible and can restrict copying, forwarding, uploading, printing, and editing documents.

  • AI tools

Sophisticated artificial intelligence features even save time and optimize routine tasks. Rest assured that you won’t have to do the same job twice. Your documents are not duplicated and are under constant control.

  • Document uploading and management

For your transactions within the data room to run as efficiently as possible, you must keep your document system in order. VDR makes this chore much easier by offering automated documents such as bulk uploading, automatic indexing, support for many file types, meaning no conversion is necessary, and more. The smart search function can find the document you need in seconds. All you have to do is enter one or more keywords into the search engine. Create an unlimited number of folders and subfolders and organize your files in a unique structure that will be useful for your colleagues and potential partners.

  • Communication and collaboration

The Data Room allows you to do collaborative work without leaving your secure space. This is made even easier given that the centralized area will enable you to have everything you need at your fingertips. In addition, VDR offers question-and-answer features, document annotations, encrypted chats, document sharing, and integration with other useful programs such as CRM systems.

5 key points of any Due Diligence process in M&A

Due diligence is an essential part of an M&A transaction for both buyers and sellers. In this article, we will discuss the main aspects in preparation this procedure and the role of virtual data room technology in this process.

The role of due diligence in M&A deals

Any M&A agreement, including in the agricultural sector, has a complex structure, requires prior planning and coordination of its stages, a comprehensive approach to implementation. Detailed preliminary study of the object of the agreement plays an important role in the implementation of M&A projects.

Regardless of who initiated the M&A agreement – the seller or the buyer – the operational goals and motivations of the parties for obvious reasons are opposed. Economic benefits, as the result of the transaction, encourage the seller to conduct pre-sales training, during which at best measures are taken to resolve problematic issues of the enterprise, but often it comes down to cosmetic completion of missing documents on significant indicators, masking existing shortcomings.

The importance of due diligence of the object of the acquisition is fully explained by the need to confirm or refute the declared by the seller indicators of the object of the transaction, to identify hidden defects and risks. The conclusions and results of the study can radically change the previous agreements of the parties, the structure of the future agreement, and in some cases – even question the feasibility of its implementation as a whole.

Key aspects of due diligence for M&A transactions

Due diligence is the analysis and examination of a company, primarily in the context of company sales and purchases. It serves to examine the legal, tax, financial and competitive conditions of the company, as well as to confirm a company’s value and ultimately a realistic purchase price. Buyers want to identify risks that can be used as an argument for reducing a purchase price and outsourced to the seller as part of the drafting of a purchase contract.

Carrying out a due diligence check is not only time-consuming for the buyer, but also ties up considerable work capacity for the seller. The M&A due diligence includes 5 key points:

  • compilation of the documents/establishment of the virtual data room by the seller;
  • disclosure of information/evaluation of documents by buyers;
  • submission of questions and document requests by buyers;
  • answering questions/supplementing documents;
  • creation of due diligence reports by audit teams.

Finally, all findings from the individual audits are summarized in the due diligence report. In the area of M&A activities, the report serves to summarize the results of the examination of the project in question and then serves as a basis for decision-making.

Virtual data room – secure digital workspace for M&A due diligence

Depending on how complex the corporate structures of the potential new customer or existing customer are, the research work can be very time-consuming and complex. In any case, a group of specialists involved in conducting a comprehensive study of the company’s activities should work out significant volumes of documentation and information provided by the seller’s representatives, and check the results from alternative sources. Thus, the creation of planning documents, an inspection of agreements is set up in a restricted-access electronic data room.

Virtual data room is a secure collaborative platform for file-sharing between contractors, that provides transparency into business operations. A table of contents (“data room index”) is created for the entire inventory of documents, which makes it easier for prospective buyers to orient themselves during the check.

Clinked Virtual Data Room Review

Virtual data rooms are surely an indispensable part of any business entity when it comes to online collaboration and secure storing of sensitive business data. This article is a review of Clinked Virtual Data Room.

What is a virtual data room?

Many digital solutions are emerging today to address the traditional challenges of information availability, storage reliability, rapid disaster recovery, and high availability. However, to maximize the return on investment and ensure the freedom of the authorized user to work with information, a combination of existing and new tools can be effective. One of such technologies is a virtual data room (VDR), which is developed for enabling a secure collaborative environment for business transactions.

The functional architecture of the classical data room consists of three components:

  • data warehouse. This is the basis of the VDR system. Here is the operational information from various automated modules of the head office and branches of the organization, from subsidiaries.
  • a set of tools to support enterprise management technologies: financial planning, management accounting, forecasting, etc.
  • OLAP tools for operational work with business data accumulated in the warehouse.

So,  the purpose of VDRsystems is to automate the strategic planning of business deal development and to support tactical business process management at different levels. The task of VDR systems is to help in realizing the strategic goals of the business in real conditions ensuring secure collaborative tools. Providing the user with the right information at the right time will improve the efficiency of operational management.

Clinked data room: how does it work?

Clinked data room is a secure data management system, that is suitable for different business sectors. The software strategy is based on the following advantages:

  • the presence of a single repository of information and system, where instantly placed and where at any time available all the information about all cases of interaction with customers;
  • synchronization of management of multiple channels of interaction (organizational procedures are governing the use of this system and information in each division of the company);
  • standardization of actions because Clinked data room has clear rules for working with it, which standardizes the actions of employees;
  • continuous analysis of collected information about customers and making appropriate organizational decisions, such as ranking customers based on their importance to the company, developing an individual approach to customers according to their specific needs and requests;
  • simplified collaboration as the data room allows you to manage projects, form teamwork: distribute tasks to performers, set deadlines, and monitor the implementation of tasks by each employee.

Clinked data room allows you to have discussions in a separate tab of the card of any project, if necessary. This allows managers to quickly receive information from participants in the negotiation process, and will not be confused in any discussions, as they can view the history of the discussion at any time.

The user-friendly web interface of Clinked data room ensures geographically remote and mobile users access the central database of the system to perform all necessary actions in the document management process, including maintaining their local document management, by the rights and powers granted.

Another advantage of this software solution is the ability to build a flexible routing system, ie document movement management in the company. In this case, as a rule, an access control system is applied, which guarantees the preservation of trade secrets and confidentiality. Setting up routing schemes in the Clinked data room following business processes can be performed independently by IT specialists of the company.

Data Rooms for Startups

Investors, before making a deal, evaluate the startup project, running due diligence. In this article, we will analyze how does virtual data room simplify this procedure, its basic functions, and its benefits for business.

Due diligence – the basis of any startup project

As in traditional business, so in innovative entrepreneurship, the due diligence (DD) procedure should help to understand the real state of affairs in a startup and reduce the risks of investors and creditors of the company.

The DD process is a series of actions to verify the investment object, which the investor undertakes to make a final decision on the feasibility of investing in a particular startup. The purpose of due diligence is to reduce or completely avoid the risks associated with investing, including the risk of acquiring a quota in a business at an inflated price, losing investments, defaulting on obligations assumed by the team, withholding important data, etc.

The main things that an investor should understand for himself are:

  • understand how competent startup team members are in what they started, what they are strong in, and what they don’t understand at all;
  • evaluate the abilities of founders and CEO of a startup;
  • assess the real competitiveness of the project;
  • assess how the presented facts correlate with the real state of affairs and how the founders were honest with the investor.

Classic due diligence is a complex, often lengthy process, similar to a legal and financial audit mixed with a detective investigation. The volume, duration, and complexity of this process depend on the volume and object of the investment, as well as on the desire of the investor himself.

Due diligence data room for a startup: how does it work?

Experienced entrepreneurs understand that it is necessary to start preparing for DD and investor verification from the moment of the first presentation of the startup project, even if it is still at the conceptual stage. To do this, the company will have to prepare some documents. For this, many companies use virtual data room (VDR) to automate and simplify DD procedures. Data room is a digital platform that ensures secure file-sharing, data storage, and other useful tools for productive collaboration in real-time.

In the data room, all operations are quite complex in their logic but transparent. And due to the fact that the route templates are all configured and rules and autostart are set for them, users do not have any difficulties in their work. The task of the user is simply to work on the technology. All the technical details and nuances of starting the process and selecting contractors are performed by the program itself.

The VDR software will allow your startup to solve a number of pressing issues:

  • optimize the current business processes of preparation and approval of documents;
  • introduce standard forms of documents and procedures for their processing;
  • simplify the process of finding and processing information at all levels and create a single space for storage and processing of company documents;
  • reduce the time of creation and processing of documents, as well as increase the efficiency and productivity of the company as a whole.

It also should be mentioned, that a single database of agreements for all legal entities allows you to easily and quickly find the right one for several parameters: directly by the name of the agreement, working project, contractor, type of deal, as well as status. In addition, if necessary, the system can differentiate access to various elements of the register of contracts.