Are Data Room Providers All the Same?

Imagine that you are about to enter into a new deal and you are so delighted. As a company, you know that it is very important to invest in a virtual data room (VDR) you have most likely even done your research as to what to look for when investing in one. Here is a Recommended Data Room that is trusted by some of the biggest brands in the world because of its versatility, value, and control when it comes to sharing confidential information. 

Regardless of company size, sharing confidential information to facilitate deals such as tenders, mergers, and acquisitions, capital raises and IPOs is a critical process. The information shared during such deals is so sensitive and your company will be required to keep data private and secure. Only the parties allowed should have access to the confidential documents. VDRs make effective due diligence possible and can even improve the chances of your deal succeeding.

But with the VDR market exploding, and all file-sharing platforms looking to get a piece of the pie, making a decision to buy a virtual data room is now as complicated as ever. And this begs the question; are all virtual data room providers the same? Quite frankly, the answer is no. Not all VDR providers are the same, and neither do they charge the same. Some have hidden charges and others have inflexible contract terms that can cause chaos and ruin your deal down the line. 

What do you need to check when comparing VDR providers? Here are three things you need to review and compare when choosing a VDR provider. 

1. Security

A VDR is a secure data room that is safe to share confidential and sensitive information. When choosing a VDR however, you need to ask about the safety features that are available. For example, some VDRs offer encryption, safe collaboration with partners, easy-to-use security controls, and compliance with international standards, while others go a step ahead and apply virus scanning. 

As a client looking to buy a VDR, ensure that you work with a VDR provider that offers high security and also, performance. The platform should be secure enough to prevent exposure to unauthorized parties and easy to use for all the users both inside and outside your office.

2. Speed

When handling an Initial Public Offer (IPO) or a capital raise for your company, you will be required to deal with many potential bidders and investors. This will require you to move with speed. Ensure that you choose a VDR that allows fast setup and configuration. You should be able to upload documents quickly over high-speed internet and give answers to all questions immediately.  As you shop around for a VDR, you will realize that some virtual data rooms do not have the Q & A tool and therefore cannot handle Q&A completely. Since Q & A is a very important tool for due diligence, be sure to review this factor before settling on a VDR provider. 

3. Features 

Probably the greatest differentiating factor for VDRs is the different sets of features they provide depending on the purpose the VDR is built for. When comparing VDRs, choose one that has the specific features that you need. This will help you avoid paying for extra features that are not necessary for your company at the moment. One important tip that you will need is to choose a VDR that offers customizable reporting on investors, and potential bidder’s activities.