Tuesday, July 23, 2019 | Updated at 5:23 AM ET


How Technology Startups Are Utilizing Virtual Data Rooms to Protect Your Privacy

First Posted: Jun 27, 2019 04:04 PM EDT

In the last ten years, we have all heard of a data breach of some sort - whether it was someone's Facebook getting hacked, the Equifax data breach, or something in between, we have seen the way online databases can cause individuals to lose data, funds, privacy, and, in some cases, safety.

With the evolution of technology, we must consider the evolution of data integrity and protection. As many major tech companies have taken the spotlight in recent years, small tech startups have added additional layers of support to our technology mainframe, providing new and unique technology, websites, and services.

However, these services often require sensitive data - usernames, passwords, and personal information such as credit card numbers, social security numbers, secret questions and other important, personal data, to protect the identity and integrity of the individuals doing business with small tech startups. Therefore, it is important that small tech startups are able to effectively manage and protect their customer data.

Recently, many tech startups have begun utilizing what is known as a virtual data room to store, organize, and protect their customer's data. Virtual Data Rooms, or VDRs, as they are sometimes referred to, are often considered one of the most fundamentally secure methods of data protection. This is due to the multifactor authentification that an individual may be required to go through simply to access the database.

In tangent with the multifactor authentication that is required, in many cases, there are a wide variety of other security measures to be taken. For instance, often, access to the virtual data room is restricted to only individuals who have received authorization to access the information - sometimes from certain locations, such as company-owned networks. This ensures that the data is being accessed from a secure network only and that only individuals who have been given specific permission to access the data held within the room are granted those permissions.

Top level virtual data rooms often have additional features that make them valuable for small tech startups who may have to store and process sensitive data. In many cases, it is possible to save read-only data, as well as encrypt files, provide access records for specific information and documents, as well as automatic data backup and multiple access reporting.

These methods of data protection are valuable to many startups - they protect data and, effectively, limit the risk of data loss and liability lawsuits that may come from potential data breaches. This is important for many companies, due to the cost associated with the risk factors - data breach lawsuits, dependent upon the amount and type of data loss, can cost companies millions of dollars, which many small startups may not be prepared to pay.

Furthermore, the data stored in a virtual data room can be beneficial as a form of secure file sharing - information on particular projects can also be stored in the data room, such as fundraisers, mergers, and employee information tracking. The uses for a virtual data room are seemingly endless, making it a logical investment for many small tech startups who are looking to ensure data security.

The search for a secure virtual data room, however, can be somewhat overwhelming - tech startups may be unsure of where to turn to guarantee that their data will be safe and secure. However, there are a plethora of companies who provide virtual data rooms to tech startups at an affordable cost, ensuring the integrity of data stored on their servers.

It is important, ultimately, to do your research prior to investing in a virtual data room. Ensure that the data room company you have chosen has a positive reputation within the community. For instance, websites such as Firmex have a plethora of positive online reviews, as well as a high rating for their data security features. Companies such as these are often logical choices for individuals who are looking for well known, reputable virtual data rooms to secure their company and customer information.

Ultimately, however, the choice of data encryption and security is up to the company and the individuals who will be accessing the data. Virtual data rooms are a logical and modern choice, however, for those who feel that they need to ensure the integrity and security of their data. Initially acquiring access to a virtual data room may seem relatively expensive for a small tech startup, but as the company grows and develops, it will become obvious it is a logical investment to make.

Data security is one of many individual's top priorities when they are perusing online for services - that being said, ensuring your company's data is protected will help your small tech startup flourish, and bring company growth.

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