Virtual data rooms – Brief overview
The due diligence process is complex and highly structured. It can result in a huge amount of stress for everybody if diligence is not conducted properly. This is where the virtual data room comes in. If you are new to M&A, think as your friend about this VDR. In this guide, we provide a fast introduction to virtual data rooms, together with a few handy videos to help you better understand how VDRs work, what performance to search for if you are tasked with picking a solution and how to get the most out of the time spent in the data room.
What’s a VDR and when can it be used?
A virtual data room is a protected online environment where large volumes of data could be shared beyond an organization’s walls. A VDR is different in that is designed to share files beyond the firewall, from a business extranet. Consider due diligence in M&A deals, litigation, bankruptcies, fundraising, audits — everywhere where parties will need to review records. Online means it is available from anywhere that has an internet connection. Safe means that numerous institutional, technological and physical steps that are hardened protect your documents. We are talking encryption, biometrics, multiple firewalls and data room programs the sort of security that would give Tom Cruise and his team a run for their money in Mission Impossible. But protected means command: you can monitor, control and you get to determine who gets access to what information and complete access. A document is not seen by any one if you do not allow them to.
There is A VDR different from Google Dropbox, drive or your company intranet for a couple of reasons, the majority of which have to do with the character of confidential and privilege files. By way of instance, the VDR shows you that on this date, User A looked at this record and published it you could also configure your record preferences so that printing a document is not allowed. If you desire, you can eliminate this document to mitigate the chance of its getting or leaking into the wrong hands. You may imagine a VDR as Dropbox of steroids, a professional-grade solution that is up to the rigorous challenges of M&A due diligence, litigation and compliance.
Assessing VDR providers
There are a number of VDR Providers on the market and advisors and investment bankers have an unfortunate tendency to assume that their offerings are all the same. In fact, price structures and feature sets can vary widely. If you believe all data rooms are created equal, think again. Cost structures of VDR suppliers are very similar to internet plans and mobile phone. A base fee is paid by you, there might be extras based attributes. Some firms may also provide plans that enable you to utilize the VDR for jobs that are unique and use cases.