What Is a Virtual Data Room?
A Virtual Data Room is a safe, cloud-based platform for storage and exchange of documents and data pertinent to legal transactions and business proceedings. A central server with external connections is used for correct VDR functioning. The high safety level is guaranteed by controlled access, two-level authentication, and data encryption.
Originally, virtual data rooms were just physical spaces used specifically by lawyers as a place to “meet” with the client and discuss the details of future cooperation. Later on, they became an efficient and cost-effective way for accountants, attorneys and businessmen to view documents and exchange information online. Only strictly confidential documents and sensitive data are stored within the data room. Such platforms allow access for investors and regulators during the particular time period mentioned by the owner. At the same time, the cost of the electronic data room pays for itself frequently after the first M&A transaction.
Unlike the vast majority of physical file storage platforms, VDRs offer the following differences:
- Data control. The most important feature of any virtual deal room is its safety. Documents and similar files are protected by several security levels, including restricted view function, custom watermarks, post-data access retrieval, and others. Additionally, there is an opportunity to get a complete audit and track all the user activity inside the data room;
- User control. The owner of the platform gets the ability to assign multiple permissions and restrictions to every user. Depending on the role, the user can get access to viewing the documents on specific topics, downloading necessary materials or copying them, for instance. Such permissions can be combined with several restrictions, depending on the business needs. IP restrictions and two-factor identification limit the risk of unwanted actions of third parties with sensitive information;
- Communication tools. Q&A section is a highly appreciated and beneficial option available within the room. Users can discuss important issues, ask and answer questions inside the data room with no emails and phones;
- Customization. Corporate logo and colors of the companies can be selected within the VDR data room.
Knowing that your papers and confidential data are kept secure is priceless these days, which explains the tendency of the increasing use of data-room for business development and other solutions. There is a range of dependable and trusted providers that offer the best functions, lowest prices, and most valuable safety guarantees. A safe and convenient data room will also impress the user with the ease of use, as it will not take more than 10 minutes to set it and start effective dealmaking:
- Opt for a reliable VDR provider;
- Specify the number of documents you plan to upload as well as the number of users and parties that will get access;
- Mention the period of time the room will operate;
- Get ready with the documents you want to upload;
- Outline the responsibilities of the parties.
Why All Data Room Providers Are Different And What You Need to Choose the Right One for Your Business
While the purpose of the VDR is to keep, manage and share sensitive documents during the process of dealmaking, the main users’ concern is finding a trusted and reliable provider. It is important to remember that the best virtual data room provider helps the seller to have a successful and well-planned strategy and get ready for the deal. The buyer, at the same time, gets an opportunity to examine the data and predict all the pitfalls and risks. Therefore, the most important features and peculiarities to look for include:
- Safe data management;
- Document filtering tools;
- Digital rights management;
- Compatibility;
- Advanced search;
- Audit log and activity tracking;
- Support of several file formats;
- Drag and drop function;
- Bulk uploads;
- Possibility to have multiple projects within a single account.
Currently, iDeals, Intralinks, Merrill Datasite, WatchDox and a range of other providers guarantee high safety level and full confidentiality of documents within their deal rooms. However, to select a unique and most suitable platform from a variety of data room solutions, the user should pay attention to the individual requirements and specific needs of his/her business.
In the modern world, the safety of valuable documents is a top priority of any businessman or entrepreneur. VDR providers, at the same time, learn the tendencies and understand the needs of clients, so that they meet them and offer competitive solutions. Consequently, the vast majority of virtual data room service providers guarantee maximal safety for the uploaded documents, confidentiality of the stored information and access protection. Despite the common features of deal rooms may coincide, their peculiarities can differ greatly, so it is necessary to search for:
- Safe storage of vulnerable documents and transaction details;
- Coexistence;
- Movable documents;
- Helpful customer support;
- Compatibility.
Facing a multitude of data room providers in the UK, it will be challenging to make the right choice, unless you opt for simple features that will help you make the best decision:
- Trial period. No matter what type of business you have, it’s important to keep your sensitive information protected. Dependable and high-quality VDR providers are confident about all the services they provide, so they give the user an opportunity to test the platform. The trial period can last for 2 weeks up to 3 months, depending on the provider;
- Protection level. The safety of documents is the primary concern, so two-factor authentication, anti-viral programs, encryption and similar methods of data protection are expected;
- Errors. Learn the capacity of the data room before you start the cooperation. It will help you exclude potential risks and pitfalls.
The most popular virtual data room providers
| iDeals |
| SecureDocs Virtual Data Room |
| Firmex Virtual Data Rooms |
| ShareVault |
| Vitrium Security |
| Intralinks Virtual Data Room |
| Sterling Data Rooms |
| Brainloop DealRoom |
| DiliTrust |
| HighQ Dataroom |
| Ipreo Prism Virtual Data Room |
| iRooms |
| SmartRoom VDR |
| Venue |
| Virtual Vaults |
| FirmRoom |
| CapLinked |
| Drooms |
| EthosData |
| Onehub |