TOP 12 Virtual Data Room Providers
Data room software for secure document sharing
A virtual data room is a digital area for storing, sharing, and exchanging documents securely. While there are virtually unlimited ways to use a data room, the most common cases include M&A, corporate due diligence, portfolio management, and real estate.
Virtual data room technologies are confidently taking over the deal-making scene across the globe. Some users find value in enhanced security combined with the convenience of online collaboration. Others seek specific tools and approaches to improve their workflows by using various data room services.
In recent years, the tendency towards digitizing work processes gained unprecedented momentum. Companies across all industries found unique benefits of remote collaboration and decision-making.
Virtual data room providers played a crucial role in the global shift, as they addressed the most crucial concern for online document sharing: security. Sensitive data leaks can have catastrophic repercussions, especially for high-stake transactions, which are the main focus of datarooms and their users.
Who uses virtual data rooms?
Modern data room providers offer solutions for all kinds of use cases. However, the primary users of data room technologies remain in the following sectors:
- Investment banking
- Real estate
- Healthcare and pharmaceuticals
Although the companies from the above sectors all serve a different purpose, they have one common requirement for the data room they use. The VDR has to guarantee multiple-level security by establishing ironclad policies and following industry-defining standards.
Along with security, a virtual data room needs to feature a sufficient toolset for all possible implementation cases.
What are the main use cases for virtual data rooms?
The ways data room software is used ultimately define the direction of innovations and developments in the field. At this moment, data room providers focus on delivering the services and tools for:
- M&A. Mergers and acquisitions always involve a series of intricate transactions and processes. A virtual data room can help with streamlining the entire workflow by centralizing all the documentation offering specific benefits at every stage of the deal.
For example, the deal marketing team can use the virtual data room software to share materials and gather feedback, while the company’s HR can upload the employee contracts and other necessary files.
- Due diligence. Thorough document checks are a part of any critical transaction, including acquisitions, investments, and more. A data room can work as both the file repository and the collaboration and interaction platform for all the involved parties.
- Fundraising. The main online data room challenge of raising funds remotely is the number of potentially interested participants. Using datarooms in such a case allows capital seekers to monitor the process better, evaluate enthusiasm levels, and share just the right data with each entrant.
- Audits. A secure data room is also an excellent solution for various audits, mainly financial ones. The data room offers the necessary amount of transparency brought by activity tracking and user-level rights management. This way, the auditing happens more smoothly and productively than during the traditional data room era.
- IPO. Filing for an Initial Public Offering is a multi-stage process that requires the expertise of many different contributors, such as investment bankers and lawyers. A virtual data room allows for segregating the phases of the process and closely observing the overall progress.
- Secure document sharing. Exchanging critical data is also essential to board management, expansions, restructuring, and many other procedures. Virtual data room software that meets the specific needs of each project while offering top-grade security and versatile features always makes an invaluable addition to the workflow organization.
What security features make virtual data rooms unique?
Virtual data room providers rightfully prioritize security, as it is the foundation of every remote deal’s success. Efficient data room software can significantly improve the way sensitive data is handled by automating most processes and reducing the risk of human error.
There are several key factors to consider when evaluating the security approaches of different data room providers. They are:
- Security compliance. Data room providers must take all the necessary measures to comply with industry-wide standards. Examples of virtual data room certifications and compliances include ISO/IEC 27001, SOC (1, 2, 3), GDPR, HIPAA, and others.
- Physical security. Since physical servers power data room software, it is crucial to know where the VDR data centers are and how the provider ensures their maintenance. Some virtual data room providers facilitate their own data storage, while others employ third-party services such as AWS or Microsoft Azure.
- Access permissions. Not every virtual data room user has the same rights and privileges. Based on every contributor’s part in the project, the datarooms need to allow role-specific permission assignment for groups, individuals, and even particular sections of the online data room.
- Visual document protection. Even authorized users can accidentally compromise data safety by accessing the virtual data room in a public space. That’s why advanced data room providers offer secure-view features like fence-view or instant shield.
- Document access. A good virtual data room software will also let users configure the safety conditions on the document level. For example, datarooms can facilitate assigning file expiration, NDA pop-ups, terms of access, and more.
- User activity reports. Experienced virtual data room providers know how important it is to keep a hand on the pulse of the deal by monitoring the progress in general and every participant’s activity in particular.
- Remote shred. Data room services such as remote shredding, printing limitations, screenshotting and downloading restrictions can further improve users’ sense of control and confidence.
6 simple steps to help choose the best data room
The most challenging step of transferring your project into a virtual data room is selecting the suitable software. The data room defines how fast the deal will close and how convenient the process will be for everyone involved.
Considering the abundance of the current virtual data room market, the best solution is to follow a decision-making framework. Here are the steps to follow when looking for the fitting secure data room:
- Step 1: Allocate the data room budget
Data room services cost differently depending on the user’s company size, project type, and the provider’s price formation policies. The best idea is to look at past clients of data room providers to estimate the approximate budget.
- Step 2: Identify available data room providers
The next step is to gather a list of available, secure data room providers based on the price, regions of operation, and market expertise. This step will include checking websites and examining relevant feedback.
- Step 3: Outline the required virtual data room features
Different use cases call for specific virtual data room features. The crucial aspect here is to define the data room services and tools that will bring value to a specific project.
- Step 4: Compare datarooms
The next stage is shortlisting data room options by using the criteria from the above. Two or three data room providers should be enough.
- Step 5: Contact the data room providers
Once the target virtual data room companies are identified, it’s time to reach out to their support teams to ask questions about data room services, estimate the project’s cost, and address any other concerns.
- Step 6: Request a virtual data room demo
A data room demo can help make a more hands-on decision. And if the virtual data room offers a free trial period, the users can utilize it towards preparing the data room for future operations.
What are the real benefits of virtual data rooms?
Datarooms have effectively changed the way deal handlers approach complex transactions. Not only is it easier to process deals in the digital space, but it is also a lot safer and faster compared to the previously available solutions.
A virtual data room can significantly enhance any process with increased document protection, user activity control, and unparalleled convenience. On top of that, virtual datarooms are many times cheaper than their physical counterparts.
This means that absolutely any project can benefit from a well-chosen data room, and the sooner the digital transition is made, the better.