Due diligence is an important and time-consuming process that will catch up with any company. Business owners should always be on the lookout for their data at this point, as they are most vulnerable then. Sharing files through a common platform like email is extremely risky because these are the very places where a cyberattack can easily come at you. A virtual data room is a webspace that allows you to share files within its program in a completely secure manner and is by far the most resilient place against cyberattacks.
What is a due diligence data room?
A data room due diligence is a cloud-based repository for storing and exchanging sensitive data between multiple parties during an M&A transaction which is by far the most secure. In this location, companies can store financial, legal, and other files that need to be presented to investors during due diligence.
Your potential clients and investors can easily gain temporary access to the data room and view the documents they need without leaving their own offices. This modern option is more convenient, flexible, and inexpensive than a physical data room. The room administrator controls users’ access to documents and can even track their activity. In this way, your documents remain safe and your clients are happy, as there is no need to travel anywhere, everything is in one place and is well-organized.
What data room features help it be resilient against cyber-attacks?
Security is a top priority for data room developers, and they use modern security methods so that companies can safely store their most important documents there. In terms of security, VDRs can be compared to a military or banking institution, and below we will tell you exactly what features they use against cybercriminals and data leakage:
- Customizable user access
Typically, VDRs have a role assignment feature whereby the administrator can customize user access based on their position and responsibilities. This helps to control document security more easily, and avoid document leaks. For instance, an accounting department does not need access to legal documents, while a typical employee does not need access to intellectual property documents at all.
- Two-step verification
This feature helps to completely nullify the chances of unwanted intrusions into your webspace. With a normal login, it’s not hard for an intruder to crack someone’s password. But with the two-factor authentication feature, it will only be possible to log in with additional information or a randomly generated code.
- Data encryption
Modern encryption methods are another mandatory feature of any VDR. With it, your data is encrypted all the time, becoming an unintelligible set of algorithms. So even if there is a leak, it will be impossible to decrypt the data and the document will be of no value.
- Document access control
The administrator can also decide what access to the document one or another user can get. So, he can forbid any interaction with it, including copying, printing, saving to the hard disk and screenshot, leaving only the view function. You can also set dynamic watermarks while viewing the document as another security measure.
- Control
The administrator controls user activity in the document. He can time which document which user entered, and even how much time he spent there. During the due diligence, this helps you understand what investors are paying the most attention to. which will enable you to prepare for the final negotiations.