Although there are many virtual data room providers today, it might be challenging to choose the right one for your company. Still, making the right choice is very important as it may affect the outcome of your business in the long run.
Executives, board members, and business owners use virtual data room services for secured data storage and efficient collaboration among their business stakeholders. This article will serve as a guide, as it provides tips and important things you need to know when looking for a data room service.
What is a Virtual Data Room?
A virtual data room (VDR) is a secure online storage where digital files and documents are stored and can be easily distributed.
Online data room software is very important during the following business transactions and processes:
Mergers and acquisitions: a company that trades shares can use a virtual data room service to secure and control the deal environment. The service allows easy uploading and sharing of confidential due diligence documents, communicating on M&A questions, and summarizing the overall transaction.
Fundraising: startups or businesses which want to raise capital need a virtual data room for sharing documents with investors, and also tracking their activities to ascertain who is the most engaged and has the most interest.
IPOs: companies that want to go public need a data room to provide external parties like auditors, underwriters, and potential investors with secure and transparent access to their financial IPO data.
Board communications: board members uses virtual data rooms for managing and conducting board room meetings, sharing board materials safely, creating and assigning tasks, and monitoring performance.
5 Reasons to Choose a Virtual Data Room Service
Apart from ensuring your data is safe and secured, and sharing confidential files, there are other benefits of using a virtual data room. Some of them are as follows:
- Reduced cost. Virtual data rooms are very affordable and cost-effective in comparison with physical data rooms. First, it does not incur travel-related expenses like tickets or accommodation. Second, users do not have to pay for the data room rent and maintenance. Together, they can save thousands of dollars per year.
- Efficient communication. Many data room providers’ offers varieties of collaboration and communication tools. For example, live chats, thread discussions, comments, notifications, expert assigning, Q&A sections, etc.
- Faster deal completion. Virtual data rooms allow users to quickly upload, update, and share important documents. It helps to keep partners, investors, and team members up-to-date. In its turn, it facilities decision-making and leads to faster deal closure.
- Accessibility. Virtual data rooms can be accessed anytime and anywhere. Moreover, hundreds of users can view documents simultaneously without interfering with each other’s work.
- Eco-friendliness. Virtual data rooms end the stress behind printing and storing thousands of paper documents. Furthermore, remote access to a VDR prevents users from traveling, which reduces carbon dioxide emissions. It all has a positive impact on the environment.
4 Criteria for Choosing the Best Data Room Providers
When you are looking for a virtual data room provider, you should focus on the following characteristics.
|1. Strong data security||Choose a provider that offers: Access security features like two-factor authentication, granular user permissions, and IP access restrictions. Document security features like redaction, dynamic watermarks, and remote shred.|
|2. Advanced features||Make sure a data room has: Document management features like bulk file upload, drag-n-drop, automatic index numbering, and easy text search. Communication features like threads, live chats, video conferencing, comments, and notifications. User activity tracking features like reports and audit trails.|
|3. Professional customer support||Pay attention if a vendor offers: 24/7/365 support to be able to reach a support rep any time there’s a need. Multilingual support to be able to communicate with a support specialist in a language you prefer. Multichannel support to be able to contact a support team by various means like a phone, live chat, or email.|
|4. Others criteria||Check out the following: Free trial to test the platform for free before buying any services. Experience in your industry to make sure a platform corresponds to your business purposes. Tariff plans to choose the most suitable pricing option according to your needs.|
Also read: Best Free Unlimited Online Photo Storage Apps and Sites
5 Steps to Take When Choosing a Virtual Data Room Provider
The steps I outlined below are a guide on how to choose the right virtual data room service for your project.
- Identify the needs. You should define what you need a virtual data room for, how long the project will last, how many users will access a room, and how much storage capacity a data room should have.
- Set budget limits. Know how much you can afford to spend on a data room, as prices start from $99 a month and can reach thousands of dollars per year.
- Read the reviews. Try and understand what other users think of different providers on data room review sites.
- Compare virtual data rooms. Choose 2-3 data room providers and compare them in terms of functionality, experience, and cost.
- Book a demo. Contact a provider so that a sales rep can show you how a data room works and what the pricing options for your project are.
Choosing the right virtual data room service for your project or business is very important. This article must have given you an insight into what to look out for when going for a provider. Feel free to share this piece of information before you leave.