Starting a new venture, expanding a current business, or initiating a new mega project requires financing. For that, businesses and entrepreneurs turn to investors or investment companies.
However, among several other things, lack of communication due to improper channels and the inability to present business documents to potential investors can have a huge impact on their investment decision and dent the chances of securing required funds.
One way to ensure smooth communication with your potential investors is to use virtual data rooms. Online data room software not only provides a secure platform for real-time communication but makes data sharing safer during fundraising.
What is online data room software?
Online or electronic data room software is a secure digital document storing platform with advanced tools for business communication and project management tools.
In broader terms, data rooms are cloud-based data repositories hosted by certified online data room service providers. Businesses of any type or size can use data room software for centralized data storage and fast data sharing.
Virtual data rooms are different from other online data storage platforms due to their built-in communication tools. That means a business doesn't need different solutions for data management and intra-organizational or inter-organizational communication.
Lastly, online data room software boasts project management tools to tackle the complexities of business activities like investment management, fundraising, capital raising, initial public offerings, real estate portfolio management, etc.
If interested in more information about data rooms, their reviews, and uses in the market, head over to virtualdata-rooms.com.
Top virtual data rooms for fundraising and investment management
Fundraising is not a generic use case of virtual data rooms. Companies and fundraisers hire specialized data room services for fundraising, and here are some of the finest data room vendors in the market.
1. iDeals virtual data rooms
iDeals Solutions is one of the oldest and biggest names in the data room industry. Being the industry leader, iDeals can outperform any competitor when it comes to data management, document security, project management, and flawless online communication.
iDeals stands on top of this list because it is not only effective for fundraising, but you can use it for general data storage, project management, legal affairs, mergers and acquisitions, due diligence, and IPOs.
Most importantly, iDeals has unparalleled customer support service, which can guide you at every single step. The company also offers free trials.
If you are looking for a secure, simple, and easily affordable virtual data room for fundraising, corporate document management, deal making, and safer communication, SecureDocs data rooms can be a very reliable option.
SecureDocs allows you to add an unlimited number of users to your data room and the setup process only takes 10 minutes. Their basic plan starts from $250 per month, which is highly affordable even for startups and small businesses.
When it comes to managing complex transactions like fundraising, divestments, mergers, acquisitions, or capital raises, Ansarada virtual data rooms are an option you should definitely consider.
Ansarada has already established a name in the corporate sector due to its project management tools and a very sound data security system. The company also offers a 14-days free trial period which can help you assess whether you need their data room services or not.
Any award-winning virtual data room solution, Digify is highly suitable for due diligence, fundraising, intellectual property protection, and safer data sharing.
Digify boasts a wide range of highly useful features such as digital watermarking, document download and print permissions, file tracking, advanced data encryption, and document access control.
FirmRoom VDRs are specifically designed for the financial sector to facilitate processes like due diligence, mergers, acquisitions, fundraising, partnerships, joint ventures, and private equity acquisitions.
FirmRoom simplifies the data management and file sharing processes with optimal security. Key features include user activity tracker, file tracking, bulk file upload, bulk user invites, customized notifications, audit trails, and data analytics.
How do virtual data rooms help in fundraising?
Virtual data rooms reduce communication barriers, facilitate smooth data sharing, and ensure transparency during fundraising. Here is how.
Centralized data storage and sharing
Being online cloud-based platforms, virtual data rooms allow the fundraisers to upload and categorize all necessary documents in one place. The good thing is that high-end virtual data rooms provide a due diligence checklist for fundraising, which makes sure the fundraisers have categorized documents in the right order.
As VDRs are remotely accessible, potential investors or their representatives can easily access required documents from anywhere. They can request the management to grant access to restricted documents if necessary. Data sharing can take place in real time, and hundreds of documents can be shared in one go.
Centralized, controlled, and trackable communication is now possible with the help of data rooms. Fundraisers, investors, company representatives, advisors, and other concerned parties can involve in real-time communication through different routes such as audio or video conferencing, Q&As, document annotations, and live chat threads.
One of the best things about online data room software is that it allows you to track all the activities performed in it. Detailed audit logs can be generated to follow data room users’ activities, which leaves no room for foul play. When everyone is trackable on VDRs, everyone can be held accountable for their actions.
In the modern, fast-paced world, investors want to invest fast, but at the same time, they want their investments to be safe. Slow communication and impediments in data sharing during fundraising can minimize the chances of success for fundraisers, and it impacts the investment decisions from the investors' side. Using virtual data rooms can eliminate these hurdles and help businesses run successful fundraising campaigns.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes