Importance of Data Security for Start-Ups

You still don't know why data security is so important for a start-up? This article will explain it to you.

The word “start-up” no longer sounds strange or unusual. A start-up is a young business created mainly by a small number of people who build their business based on innovations and modern technologies. Quite often, start-ups are called “garage companies” since the founders of the start-up practice are American entrepreneurs who opened their first offices in their garages and tried to create their business there. One of the most successful examples of a garage start-up is the story of Apple’s founding.

Sometimes, in creating a company and trying to design an interesting and high-quality product that will attract consumers, the owners forget about important project components like data security since time and resources are limited, and the results were expected yesterday. So, how to protect your project data from potential risks? One of the safest solutions is online data room software (also known as a virtual data room).

VDR: What Is It?

Server room

So, what is an electronic data room? Basically, this is a cloud data repository, usually created for a specific period and for a specific purpose, which provides authorized users with access to a secure database of documents, in accordance with their access rights. Initially, virtual data rooms were created as an alternative to physical data rooms for due diligence in M&A transactions. Currently, they accompany the activities of companies in other areas, from providing information to partners of investment funds to obtaining certificates for medicines. That is, wherever it is necessary to provide convenient access to confidential information to a certain circle of people who may be thousands of miles from each other.

Why Is Start-Up Data Security So Important?

The importance of information security issues is explained by two main reasons:

  • the value of the accumulated information resources;
  • critical dependence on information technology.

Destruction of important information, theft of confidential data, interruption in work due to failure – all this results in large material losses, damaging the reputation of the start-up project or organization.

Problems with control systems or medical systems can threaten human health and life. Modern information systems are complex and, therefore, dangerous in and of themselves, even without taking into account the activity of intruders. New vulnerabilities in software are constantly being discovered. You have to take into account an extremely wide range of hardware and software, numerous connections between components. That’s why virtual data rooms are getting more and more valuable in this regard.

Virtual & Physical Data Room Comparison

A traditional (physical) data room is usually one or more rooms filled with paper documents with a clear timetable of visits. Data room software solves the problem of simultaneous access to documents and provides an opportunity for authorized visitors to work with documents wherever and whenever they want.

Woman using laptop

The reader can independently compare the costs of renting and maintaining premises and the physical movement of employees in space, on the one hand, and renting a virtual space, on the other. The cost of security will also drastically differ.

In the former case, its requirements include ensuring strict control of users and the need to take into account the notorious human factor. In the latter, virtual security implies ready-made technologies for data encryption and personalized access. Yet, the issue of safety is customized and depends on clients’ needs only. And the convenience of working with automated catalogs, reports, and search engines will probably be challenged only by zealous lovers of accounting tomes and fans of tactile sensations from touching the paper.

VDR & Start-Up Data Security

Data room services are widely used in start-ups, in the first instance, for data security. In this regard, virtual data rooms offer the following:

  • Access control using a password and information encryption. VDR uses SSL encryption (the same technology is used in banks when carrying out transactions with plastic cards).
  • Saving and printing documents are limited by access rights. Each document in the system is encrypted. To view or print such a document, you must have a data room user account and have the required access rights.
  • All customer actions, including the time spent working in the room as a whole and with specific documents, are automatically monitored.
  • All start-up representatives have access to documents 24 hours a day, seven days a week.

Man opening laptop

When it is necessary to transmit confidential information of a large volume regularly, the advantages of a virtual deal room are obvious. This is the absence of restrictions on the size of files, encryption of information, and the ability to track versions of documents and provide timely feedback in relation to specific documents. But the most important thing is the ability to access the information stored in the VDR software from anywhere in the world.

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Published on January 18, 2022 by Peter Hughes; modified on February 16, 2022. Filed under: , , .

Peter Hughes is a digital marketing consultant and author. Peter has more than 10 years of experience in SEO and Internet marketing.

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