data security

Reduces the risk of data leakage with the reliable data room for private equity

All companies today are faced with the fact that they need a digital platform to securely conduct large business operations, including private equity. This article will explain how a reliable data room can reduce security risks in business operations. 

Data room: how to organize secure private equity deals?

Private equity is a good alternative to bank loans. Many entrepreneurs have found themselves in a situation where they need additional financial resources to develop their products or service. These are direct investments that are not traded on an exchange. Such capital is formed at the expense of private investments or funds, and investors who directly invest their money in enterprises or private companies buy back companies’ shares.

So, private equity deals are based on complex financial operations. Therefore, the rapid exchange of information and the joint processing of documents are among the most important requirements for optimizing private equity transactions. Nowadays, it is possible to access data in the cloud from anywhere and with your Internet-enabled device to exchange and synchronize them and to work on files together. For many companies, especially in heavily regulated industries, information security is always a top priority. It is what can be guaranteed with a virtual data room.

The software offers a flexible access rights control system with a shared, centrally managed workspace and integrated data management. You can read more about it here. Data room security measures include personalized, watermarked documents that become unreadable after a preset time via Adobe Digital Rights Management, data encryption, two-factor authentication, etc.

In addition, the software automatically encrypts the PDF documents to be distributed with different keys and makes them available in an internal transfer directory. By possessing the appropriate key, users are only granted access to the document group intended for them.

Reasons to use data room in private equity operations

There are main benefits of the data room solution that can explain the necessity of this solution when arranging private equity deals:

  • Improved collaboration 

Virtual data rooms make it possible to access the required data anytime, from any location, and, above all, securely. Since the data rooms can usually be reached via the Internet and a web browser, employees do not first have to set up an additional VPN connection. Furthermore, the data is also available offline. Providers of virtual data rooms often also offer live synchronization between the PC drive and the cloud, which makes access to relevant company data even easier.

  • The highest level of data security – for information and companies

While the protection of personal information is required by law through the EU GDPR, other sensitive, business-critical, or secret documents, such as patent applications or design drawings, are less protected by the legislator. However, their loss can have serious economic consequences for companies. The reliable data room offers the highest level of security for all documents thanks to consistent end-to-end encryption during transmission and storage. Unauthorized persons cannot decrypt this data so that it remains worthless to attackers and is not disclosed.

  • Assignment of access – flexible and individually adaptable

Only defined groups of recipients are granted access to the virtual data rooms. Based on a flexible, fine-grained assignment of rights, companies can assign exactly the access rights that each person involved in the project needs for their respective role. For example, external partners could only read and download data, while colleagues can add, delete or administer data. The rights can not only be assigned to one or more data rooms but also individual documents. Activity logs provide team leaders with a precise and transparent overview of all processes in the data room.