What is a Data Room and Why do Many Deals Include a Data Room

A VDR is an web information repository that is used usually to store and distribute documents. This due diligence process has traditionally used a physical VDR to disclose documents. For reasons of prise, efficiency, and safety, VDRs have wide replaced the more standard physical VDRs.

The VDR is an extranet that includes bidders and their advisors. An extranet is essentially a website with limited, controlled access using a secure login provided by the seller, which can be disabled by the seller at any time if the bidder chooses not to do so. Most of the information disclosed is confidential and the viewer’s ability to share it with third parties (by forwarding, copying or printing) is limited. This can be effectively applied to protect data through digital rights management.

Who Uses VDRs and Why?

What do you use the VDR for? It is common to meet individuals and legal entities involved in e-discovery, M&A and venture capital using VDRs to view all their data and files in one place, archiving and collect legal purposes. Some call it the “meeting room”. In addition, VDRs are also often used by board members of large companies to collaborate in a secure environment.

All of this usually does not happen on the same network, since the parties are from different companies. You can say that a VDR is a kind of extranet, i.e. it is not public and does not only work within your own company, as is the case with an intranet. The use of VDRs is primarily for management and compliance purposes and not to improve user experience.

VDR Vs. Dropbox and Others

Okay, we get it, but why don’t we use all the popular providers to share files in the cloud? Have you ever received an email with a phrase like “I’ve uploaded a contract to our shared Dropbox drive”? We hope not. The big difference here is https://www.aviationanalysis.net/why-virtual-data-rooms-are-so-successful-for-document-management/. Actual features will of course vary depending on which virtual VDR provider you choose and what data plan you pay for. Here are some features you may need:

    • encryption of data;
    • audit trail and activity tracking;
    • management of digital rights;
    • access control;
    • Online document viewer (in the browser);
    • bulk upload, drag and drop;
    • all the storage space you need;
    • use functions appropriate to your use case;
    • protection from external threats.

The Best VDR Vendors

We’d like to point out a specific company to turn to, but often there isn’t one right software solution for everyone. Depending on your budget, functional requirements, due diligence requirements, business requirements, legal requirements and all your partner’s requirements, you need to carefully review and compare VDR solution and digital room providers. Here are the main:

      • BlackBerry Workspaces (WatchDox)
      • Secure Brainloop VDR;
      • Citrix ShareFile VDR;
      • Virtual VDR from Drooms NXG;
      • Intralinks Merrill DatasiteOne;
      • Nasdaq Board Vantage;
      • Software defined access package from Safe-T;
      • SecureDocs VDR.

There can certainly be other good ones, but this is a good starting point for your comparison and evaluation. It is also worth noting that you should look for “local” providers or at least choose a global provider that understands the legal requirements of all countries involved in the transaction and the relevant laws.