More and more companies are recognising the benefits of virtual data rooms. But when would you use a virtual data room, and when choosing a solution, what should you look for in your data room due diligence?
You may be looking to increase investor engagement, enhance security, improve compliance or to save time and money. Maybe all four! Whatever your primary motivation is for creating a virtual data room, there are some core considerations.
What is a virtual data room?
First, let’s look at what we mean by a virtual data room. What is a virtual data room used for?
A virtual data room, sometimes called an online data room, is an online repository for information, used to store and share documents. Because of their highly-secure nature, and ability to be accessed by authorised users in a range of different locations, virtual data rooms are often used to support corporate transactions such as M&A deals and IPOs, hosting the information investors need as part of their due diligence process.
By providing easy, highly-secure access to the documentation needed, using a virtual data room can facilitate and speed M&As and other corporate transactions, saving time and money for all involved.
So far, so good. But choosing the right provider is make-or-break if you’re thinking of investing in a virtual data room. How can you be certain that you choose a product and provider that works for your business and delivers what you need?
Choosing a virtual data room provider
The 5 things you should look for when choosing a virtual data room
What is the provider’s history, and what sort of reputation do they have? Delivering highly-secure data rooms is a specialised skill; what experience do your shortlisted providers have? Are they familiar with providing secure online platforms for confidential data? Do they have customer testimonials and case studies they can share with you? A good provider should have a wealth of positive client stories.
Have they worked with companies like yours? Businesses in different industries can have very different requirements in terms of confidentiality, security and regulatory compliance. If you can partner with a provider with experience in your sector who really understands your needs, it can be a big help.
The right data room can significantly enhance security for your corporate and investor information – but to do so, it needs to be a highly-secure solution. Your data room will hold your company’s most confidential data, so you have to be confident of the highest levels of security, with encryption in transit and at rest, two-factor authentication and full hosting accreditations.
User-friendliness. If you’re hosting investor information in a virtual data room, your users will range from corporate, IT-savvy people to those with no previous experience of using online data rooms. Whatever solution you go with needs to be easy to use for all who access it, with on-hand customer support available when needed.
A flexible pricing structure. A virtual data room should enable you to save time and money. When comparing providers, ask about the pricing structure. Is the solution you’re considering cost-effective? Does it provide everything you need, without mandating unnecessary extras? Is it scalable and can it grow in line with your requirements?
Get it right when you choose a data room provider
A virtual data room can be a huge benefit to companies needing to host and share corporate information. Get it right and you can enhance the security of your data, save time and money, increase investor engagement by giving potential investors an efficient way to access due diligence data, and at the same time obtain invaluable investor insight.
Perivan’s online investor interaction platform, Engage, provides a highly-secure solution for online corporate data, backed by responsive customer support.
We have vast experience of working with companies to publish, share and communicate corporate and financial information, with a long-held understanding of what’s needed when working with confidential data. By combining this insight with our technology capabilities, we are able to help companies like yours achieve the benefits of using virtual data rooms.
You can find out more about Engage on our website, or contact us for a no-obligation chat about how we could help you with your data room needs.
Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.