In business circles, virtual data rooms have gained broad publicity. However, not everyone realizes what VDR softw is exactly. Many business holders wish to apply “services like these” to their deals but they barely understand how the best data rooms can be chosen. This quick review is enough to get into the matter.
What Business Seller/Buyer Should Know about Data Rooms
Data room software represents a complex set of tools designed to substitute physical deal rooms of the past and improve the whole due diligence process or such likes. These are not just repositories where one can store and maintain documentation. VDRs are ideal for online negotiations with the necessity of checking piles of papers and revealing secret info. Moreover, they can ensure document security.
Thus, usual cloud storage services have nothing to do with a virtual data room – when it is actually a VDR. A real web data room can offer you many more options indispensable for your buy/sell operation. The key reasons are given below.
Why Use Virtual Data Rooms by M&A
There are obvious advantages of online data room software. Surely, we got accustomed to carrying things on the Internet. So we often place a priority on convenience – when nobody needs to go anywhere or tow paper packages along. However, consider other features that will be crucial for any M&A transaction.
1. Security
The first thing you will worry about when launching a buy/sell deal is security. Wrong eyes intervening in the paper interchange may cost you a pretty penny. A proper electronic data room offers you a set of functions that will ensure your sensitive data’s security:
- Multi-factor authentication;
- Modern encryption techniques;
- Watermarking options;
- The ISO 27081 standards of the storage clouds use;
- Support during transactions, etc
Such preventive means will leave no chance for all types of hackers or password thieves. Watermarking tools will help you to avoid unauthorized copying. Moreover, if any trouble occurs or you have any doubts, you can expect responsive support right in the course of the deal.
2. Permissions
Who can access your sensitive data? That is another significant question for businesses’ security. The best virtual data room providers can offer you here a big set of functions that include the ability to limit the number of employees with access to your secret docs. You can regulate access levels to this or that class of papers. The main features here:
- View-only options
- Defining the limits of sharing
- etc
3. Docs Management
This feature is extremely useful for any VDR due diligence because it makes the process smooth and well-elaborated. You can organize your VDR beforehand so that all parties involved can go over all the important documentation. You and your partners will be at least able to use:
- Convenient tools of uploading and classifying data;
- In-text search;
- Excel viewers;
- Multiple search filters, etc.
4. Due Diligence Checklist
When you sell a business, this set of tools will allow you to prepare all necessary docs and create a positive image of your company. When buying is on your mind, you can ask your partner to make a due diligence checklist for you so that you can evaluate the possible benefits and drawbacks of the deal quickly and without plunging into studying excessive papers.
5. QA Section
This might be not that fresh instrument and the best data rooms have much more to offer in this respect. However, sometimes, a Question/Answer format is enough for a deal. A properly-arranged QA section of your VDR can definitely save you time.
6. Analytics Tools
A great feature of the top-class VDR is that you keep the whole deal under control. At any moment, you will be able to request a report on any participant as for their IP, devices, and activities in your VDR.
How to Pick the Best Data Room
Data room services differ from each other and It may seem an unsolvable problem to find the very VDR you need. But we insist that this is quite simple – you only need to make your choice based on the following considerations.
#1 Define your requirements. You should pick a data room that includes all tools necessary for mergers and acquisitions.
#2 Never use free services and be reasonable at price calculations. You cannot expect proper levels of security and functionality with free services. You might rather lose your money and secret info than close a deal.
#3 Attention to the provider’s reputation and experience. No matter how beneficial offers from unknown providers may seem, make it a rule to opt for reliable ones with positive reviews and excellent practice in the market.
And that’s it on a large scale! The latter point will ensure enough security and support for your deals. While all three combined will make your buy/sell transactions successful and profit-bringing.
