5 Intellections Every Startup Requires a Virtual Data Room
In the days of predominately hard-copy data such as folders of paper and index cards, securing your data could be as simple as putting a lock on your filing cabinet, or perhaps having a dedicated room with a sturdy, locked door. Things aren’t quite so simple for digital information, and in a digital world, that can be a problem.
This is especially the case for startups where ideas are capital, and being the first to market with a new idea can be the difference between success and failure.
A virtual data room or VDR is the solution to this problem, and here are five reasons why no startup should be without one.
1. Safe and Sound
First and foremost, VDRs offer you secure storage for your data. As mentioned, the protection of new ideas and innovation is crucial in any business, but mainly to startups. Having the hottest new design is of little use if another company gets wind of it and beats you to market.
But it’s not just about ideas. Sensitive information such as employee data, medical records, licensing, and financial information can all be kept safe from prying and evil eyes.
It’s no secret that an email is faster and more reliable than a letter. Digital information is simply more convenient, and that makes a world of difference when dealing with investors, contractors, remote employees, and any other situation in which information in one location is needed in another area.
With a VDR, your data would be available at all times, as opposed to only when there is someone in the office ready to retrieve and send it. And it will be accessible immediately. These simple efficiencies can vastly improve your startup’s viability in those early days and beyond.
3. Easier on the Wallet
Technology isn’t always cheap, but even with the costs buying or renting the necessary hardware to run a virtual data room, it still works out far more cost-effective than producing and storing reams of hard-copy data.
The physical space requirements for a standard hard-copy information repository are not only costly but inefficient and inconvenient.
Consider that there are not only the added costs of the space itself and the materials involved in making hard-copy information but also the added labor costs of accessing any information stored in this manner. A search engine is much easier and faster to use than even the best physical filing system.
4. Complete Accountability
When dealing with potentially sensitive data, and especially when access to said data is open to more than one party, it can be essential to keep detailed records of any activity taking place. VDRs are perfect for this, allowing for the total logging of even the smallest edits, deletions, or additions to the data stored within.
This is a crucial feature of VDRs and should be considered an essential aspect of any startup, especially if buying and selling is part of the business. In some cases, it may even fulfill specific regulatory requirements.
Perhaps one of the most significant parts of running a startup is getting the interest, and ultimately the backing, of investors. This is a particularly tricky business, as it requires you to not only sell a potential investor on your idea but also on your ability to deliver on that idea.
It’s not impossible to win such good faith with a winning smile and a firm handshake, but the chances are your potential investors are going to need more than that.
Information transparency will go a long way to gaining that trust. If your investors (or lenders) can see that you are open and honest in your dealings with them, they are far more likely to back you financially.
This can be an issue with hard-copy data, where data leaks are as expected on accident as they are malicious, but with a VDR, you can be sure of secure and convenient data transparency.
So, in conclusion, a startup can succeed with a virtual data room. But with the added convenience, security, and lower costs, the question is, why would they want to?