A virtual data room is a secure online area where companies can store their documents. An infographic can provide an accurate and compelling portrait of your business and help investors better understand your business. So, how do investors use this software?
Data room software for investors` needs
If a round of financing or a sale of the company is pending, the investors – as part of the due diligence – require a structured presentation of the essential documents and information in a so-called data room. For society, the data room offers the opportunity to present itself as a well-positioned and sorted company. The data room becomes the company’s flagship if the requested documents are available quickly and in full.
What is often only latently announced in investing deal management then comes to light in the event of a sale. Non-stringent document management increases effort and costs considerably. A lack of transparency, structure or too much information leads to price reductions and the assumption of guarantees, ultimately jeopardizing transaction security. The fact that digital data rooms are set up and used for sale does not counteract this deficiency. On the contrary, it sometimes makes it obvious. Only the greatest possible transparency and authenticity of the factors determining the essential value creates trust and ensures a serious sales process.
Therefore, digitized data enable analyses, decision templates, risk assessments, and reports of any type and scope at the push of a button. It creates flexibility and efficiency in portfolio management, minimizes risks through transparency, and, last but not least, increases the speed of due diligence and transactions during investment operations.
Deciding on the right IT system for archiving and maintaining a wide range of information causes a lot of headaches for most real estate investors. Security requirements, performance, processes, functionalities, compatibility with the company’s existing IT infrastructure, and, of course, the costs incurred are all important aspects that often must be weighed up in lengthy decision-making processes. The basic prerequisite for permanent data management in electronic repositories and data rooms for developments, construction projects, or transactions is an intelligent, clear, logical structure with a clear naming convention and a high degree of discipline.
How to work in the investor data room?
Electronic file management via the data room software is the most efficient lever for digitization because it makes the information usable. Digital data room ensures many benefits for investors:
- The files can be created quickly and automatically;
- There are several ways to organize documents;
- The structure of the files can be easily standardized and flexibly adjusted at any time;
- Document-level access control and other security features;
- The files can be used simultaneously and on mobile by several people;
- Secure collaboration when reviewing and modifying documents;
- Document versions can be tracked and traced;
- Automatically route documents for review, approval, etc.;
- The knowledge is made available centrally to all authorized persons;
- Business processes can be efficiently automated with digital documents;
- The documents are optimally protected against accidental or intentional destruction by data backup.
Investors can access data and documents via the browser interface. In this way, they can do without installing additional software and, in principle, access the data room from any desktop computer, whether in your home office, company, on the road, or at a customer’s site. In this case, the system opens up new opportunities to work more flexibly than ever before.