iDeals is the number one Virtual Data Room (VDR) solution for confidential data storage and sharing. With high-level security at the core, iDeals offers over 100 exclusive features for file management and enterprise collaboration at a flexible price.
Intralinks is a financial technology provider that offers a VDR with intuitive user interface (UI), one-click mobile access, and round-the-clock user support. The newest version of Intralinks' data room is 50% faster and even more flexible than before.
Datasite is a top-tier SaaS provider that works across the M&A industry. The company’s core products include virtual data room solutions for deal marketing, deal preparation, due diligence, and buy-side offering.
BlackBerry Workspaces is a highly secure enterprise file sync and share (EFSS) solution. The platform is the go-to choice for sensitive data storage and collaboration in any industry, including healthcare and legal.
Brainloop is an all-in-one platform that offers industry-leading collaboration solutions for board communication, confidential transactions, and file sync and share. Brainloop’s flagship solution is BoardSuite – a superior board portal for teams.
Onehub is a cloud storage and data room services provider chosen by more than 1 million clients. Apart from its best-in-class security, Onehub offers customizable layouts for a branded and more elegant look for every client.
CapLinked is a top-notch VDR and file management software that provides full-cycle solutions for M&As and due diligence. One of the platform’s strongest benefits is its user-centric interface, allowing for the quick start and easy document management.
FORDATA is the premier virtual data room solutions provider in the Central and Eastern Europe (CEE) and Baltic region. Electronic banking-level security is the fundamental characteristic of FORDATA, along with round-the-clock customer service and flexible user access management system.
Ansarada is an AI-powered VDR company with complete lifecycle solutions for financial deals, portfolio management, board communication, etc. Smooth design, unparalleled security and AI automation are Ansarada’s trademarks.
ShareVault is a cloud-based storage and file sharing platform with comprehensive security and control features such as a remote shredder (ability to revoke user’s access even after the file was downloaded) and activity tracking tools.
A virtual data room (VDR), also known as a deal room, is a secure online repository for document storage and distribution. It is typically utilized during the due diligence process preceding a merger or acquisition to review, share, and disclose company documentation. Taken from investopedia.com.
Virtual Data Room: A Must-Have Tool for Secure Online Document Sharing
Virtual data rooms are becoming an increasingly recognized tool for safe digital organizational management. After the COVID-19 crisis, now more than ever, it has become vital to invest in digital infrastructure and take care of data security. With their extensive, easy-to-use security features and collaboration tools, virtual data rooms become important for maintaining productivity, order, and security in 2021. Let’s take a closer look at what makes VDRs irreplaceable in 2021.
Security: The most important feature in data rooms
How you look after sensitive data, such as employee personal information, intellectual property, and company financials, is essential for business success and employee safety. Overlooking data security can lead to legal issues, reputation damage, and unexpected costs. For example, General Data Protection Regulation (GDPR) fines rose by nearly 40%, and penalties totaled around €150 million ($190 million) in 2020.
Virtual data rooms provide specific security features to keep your data protected. The best virtual data rooms comply with international security standards such as GDPR, ISO 27001, SOC2, HIPAA. Important security functions include:
Data encryption for files and messages
Customizable user permissions
Revoking access after download (remote shred)
Virtual data rooms are also designed with features minimizing the risk of human error when handling documents, for example:
Option to disable print/download/forward/modify functions for certain users
Option to set document access expiration
Access to complete audit trails on user activity
At a time when data is considered the most valuable resource in the world, such precautions ensuring the security of sensitive data are more of a necessity than an option — and luckily, those precautions are provided by virtual data rooms.
Find out the best virtual data room
How many GB do you plan to upload to the virtual data room?
Virtual data rooms first originated in the financial sector. Subsequently, they are still most commonly used for managing financial transactions like Mergers & Acquisitions, IPOs, fundraising, and real estate deals.
However, as more and more industries are transitioning to the virtual space, online data rooms are increasingly gaining popularity within other business sectors. Data rooms are increasingly used across the healthcare industry, for example, for clinical research, to keep patient records secure.
Today, many start-ups, non-profit organizations, and associations dealing with sensitive data management use virtual data rooms to protect their client information and run processes more effectively.
The most common use cases of virtual data rooms
M&A Due Diligence
As M&A due diligence is a highly demanding and time-consuming process, an online deal room can help run the process more smoothly, reduce administrative costs while keeping sensitive documents in a central, controlled environment. Permission-based access can prevent unwanted downloads or copies, or restrict access to certain documents completely.
Virtual data rooms provide a platform for an easy and structured way to present all necessary materials for potential investors and sponsors. Extensive search functions save time and allow authorized users to quickly find any document or file — rather than searching for and reviewing multiple emails.
Typically auditors have to inspect nearly every aspect of the business or organization. Providing auditors with well-structured, secure data storage accessibility without requiring travel benefits both parties, especially if regular auditing is an automated process within a data room.
Ensuring regulatory compliance is very important in every business sector. Complying with regulatory requirements not only safeguards one’s business but also protects it from unexpected expenses, penalties, and even lawsuits. VDRs can ensure transparency and create a platform for working with outsourced specialists or share information with regulatory bodies to minimize the risks of unintentionally breaking the law.
Virtual data rooms can help streamline the litigation process, providing a central, secure space for collaboration during pre-discovery, and a secure way to share documents with opposing counsel or other parties.
Initial Public Offering (IPO)
Structuring and coordinating an IPO is a complex, time-consuming, and stressful process. Inevitably the IPO process leads to stakeholders scrutinizing the company’s financials. A virtual data room ensures data security while third parties are constantly, and sometimes disorderly, requesting, reviewing, and analyzing files. A well-structured data room also proves your professionalism and transparency to regulators and potential shareholders.
Virtual data rooms allow procurement specialists to safely communicate and collaborate with contractors, legal counsel, and other third parties without having to schedule physical meetings. A virtual data room makes the process of collecting requests for proposals and evaluating bids easier, thus resulting in a more competitive price for desired products or services.
A lot of partnerships involve heavy document sharing. A virtual data room can assist in making communication and collaboration more cost-effective and transparent. A strategic partnership could be, for example, between real estate developers and subcontractors, product owners and manufacturers, etc., working with heavy file formats, sensitive information, and intellectual property.
Most virtual data room software generates automatic reports and extensive analytics. Automating the reporting process saves time and can be helpful for any business.
The board of directors holds a lot of responsibility for the organization’s future and employee well-being. A virtual data room provides a safe platform to collaborate effortlessly, to view documents, have internal discussions, and invite external parties such as lawyers, accountants or regulators, when needed.
Intellectual property management
Online data rooms are perfect for exchanging sensitive documents for joint ventures involving intellectual property (IP) such as trademarks, copyrights, patents, even trade secrets. They minimize the risk of third parties profiting from leaked information and keep records of everything related to your IP.
When it comes to choosing the best online data room vendor for your use case, look for a vendor specializing in your industry. That way, you can rest assured that they already know what your needs will be and are ready to accommodate you.
A physical data room is a space (conference room, office room, or other designated area), at the company office where authorized users can access and review sensitive files and information. It can also be an off-site rented space. Regardless of the location, it has to be under constant surveillance to control who enters the room. In this case, people have to schedule an appointment and physically travel to the data room to do their job. It makes the process more time-consuming, costly, and inconvenient.
When a virtual data room is set up, the process becomes more flexible without losing the layer of security. Files are stored digitally and are not tied to a physical office space. Since the information can be accessed 24/7 from anywhere, involved parties get the work done much faster.
Compared to physical data rooms, virtual data rooms make the process more efficient and can reduce costs. Multiple user groups can work or review the same files simultaneously and ask questions on the platform. A virtual data room makes it possible to view an audit trail and analytics on user interaction with your documents, something a physical data room is not capable of. A VDR lets you track who has viewed which files, for how long, when, and exactly which pages.
Virtual file-sharing services vs virtual data rooms
Virtual file-sharing services such as Google Drive, are cloud-based file storage providers that allow users to share files across devices. To some extent, virtual file-sharing services are similar to virtual data rooms. They both provide online storage space for sharing, reviewing, and storing data, however, VDR’s offer many more security layers, functionality, and customization.
Virtual file-sharing services offer free storage for users with minimal storage needs. For example, Google Drive offers the first 15GB for free. Premium storage packages are available and provide customized additional space for an added monthly/annual fee. At the same time, top-rated data room service providers offer unlimited storage, extensive roles and group management, and automatic data labeling as you upload files. A virual data room free trial (most often) comes with full functionality, security certification, detailed audit trails and reports, customizable interface, multiple language interface, 24/7 customer service help, and many other features.
Depending on the sensitivity of the documents, needed functionality, and access permissions, a virual data room can make a project run smoother. However, if you are working on a small-scale project, intend to co-create documents, or do not require extra layers of security, a file-sharing service might be a simpler solution.
How to compare and choose the right virtual data room
Looking for the right VDR provider for your business can seem like a daunting task. However, once you know what to look for, you can easily narrow it down to the best data room providers for your specific needs. Follow these steps to find the most suitable electronic data room provider for your business:
Look for expertise in your industry. A lot of VDR service providers tailor their software to a specific industry or use case, such as M&A due diligence, auditing, legal operations, etc.
Check provider compliance with data security certifications. Check whether the VDR service provider has been audited by ISO/IEC 27001:2013 Certified Data Centers or SOC 1 or SOC2 (Type I, Type II) Certified Data Centers, is GDPR compliant, or has received HIPAA compliance.
Compare provider ratings and reviews. User experiences are the best way to evaluate a data room, but keep in mind that the mosttrustworthy reviews come from your peers, business partners, or people you trust. Some companies list their biggest clients on their websites. It can be a good indicator of what type of industry leaders have chosen their data room solutions.
Evaluate offers based on price vs. needed features. A lot of data room services provide different levels or packages depending on the size and duration of your project and desired features. Determine what the most needed features are, how many users you will have, how much storage space you will need, etc. Once you’ve decided on specific parameters, compare vendors to find the best deal and fit for your specific needs.
5 Tips for maximizing the value of your VDR
Although a virtual data room can help you reduce costs and operate more efficiently without a well-designed structure, it can easily turn into a nightmare. These five tips will help you keep your virtual data room in order and ensure effective business operations:
Create and follow a specific file naming system. Everyone using the platform must be able to find what they need easily. To make that happen, set rules for regulating and structuring your VDR and make sure everyone who uploads documents follows those policies.
Take advantage of role-based access. Setting up granular user permission before inviting everyone to the platform can save a lot of worries beforehand. To create custom user groups and configure their access, first estimate how many users you will have and what type of roles and access you want to provide. Then either set up access for each group or each member — it will save a lot of time in the future.
Customize your Virtual Data Room. Make the Virtual Data Room an extension of your company’s brand. Add your logo, company’s colors, a welcome message, and a personalized invitation to access the platform.
Find the right person to lead the transition. Choosing a technically savvy and enthusiastic person to lead the transition can save you a lot of frustration. A confident, experienced data room manager can answer employee questions easily and provide the encouragement needed in turbulent times.
Do not overlook analytics. Remember to take advantage of data insights generated by your Virtual Data Room software. You can track macro-level engagement by document, user, or role. You can save Q&A transcripts for future training purposes, and you can export automatically generated reports for your board meetings, etc.
Virtual data room services offer many advantages due to their cost-efficiency, accessibility, security measures, and ease of use. Unlike physical data rooms, virtual data rooms have multiple useful features, such as permission-based access to certain files or file types, extensive search functions, encryption, Q&A tools. Also, they’re accessible anytime from anywhere.
A virtual data room is a cloud-based solution set up through a proprietary extranet and accessed via the internet. The virtual data room provides access to documents and files only to authorized users. Access is controlled by the system administrator.
In M&A due diligence, a data room is typically a place (on-site or virtual) that holds all necessary documents for the transaction. A digital data room is a collaborative platform allowing multiple parties to share, access, and review confidential documents securely as M&A due diligence is a highly demanding and time-consuming process. An M&A data room can help the process run smoother and reduce administrative costs while keeping sensitive documents in a controlled environment.
A data room is considered secure if the VDR service provider has security compliance, such as ISO/IEC 27001:2013 certification (the most comprehensive security certification for providers of virtual data rooms), SOC 1(SSAE 16, ISAE 3402), SOC 2 Type II, FedRAMP, HIPAA and GDPR. Best data room providers offer encryption, two-factor authentication, automatic watermarks on documents, the option to revoke access even after downloads, option to restrict features like print, save, modify for certain users.
Once you have compared various virtual data rooms, select a virtual data room provider. Create a list of required documents, name your files and folders following a specific file naming system, create a structure with folders and subfolders. Set access permission to user groups. Before inviting new users, test the system by doing searches. If everything is functioning the way you intended, invite users. Remember to update files regularly.
If you are just starting out and looking for a free online data room option, you may consider a solution like Google Drive. There are also a couple of data room companies offering a low-cost solution. However, depending on the security needs, the number of users, and storage size, it is worth considering investing in a trustworthy digital infrastructure. If security is not your project’s biggest concern, and you do not require extensive features, consider using traditional file-sharing software for free.
Look for expertise in your industry and software tailored to your needs (M&A transactions, real estate operations, fundraising, etc.). Always check provider compliance with data security certifications, and compare vendor rating and reviews. Finally, ask various VDR providers for a quote and evaluate offers based on price and functionality.