Virtual Data Room Providers
Virtual data rooms have become an indispensable tool amongst various industries for the secure sharing and storing of confidential documents online. However, while these platforms might seem interchangeable with one another or other generic document sharing services, it’s important to understand that they all differ in the level of effectiveness for certain tasks. These differences should be taken into consideration when making your decision of which VDR is best suited for your business needs and which provider to partner with. Below we will provide a walk through of the industries that use a virtual data room, various provider profiles, our selection for more effective VDR provider, and the best way to choose one for yourself.
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Who uses virtual data rooms?
Anyone in need of secure document sharing services are candidates for a virtual data room, however, there are a few businesses that require these platforms more intensively for their intricate deals and transactions. Below are a few common use cases and how they help to facilitate smooth sharing and collaboration among the corporate, mergers & acquisitions, and litigation industries.
Mergers & Acquisitions
Virtual data rooms are rich in features that help advisors and investment bankers build their careers by facilitating quick and easy deals for buyers or sellers. An advisor is able to set up a deal room for their clients quickly and allow them to remain in control of the documents they wish to share. With advanced reporting, an administrator is aware of which documents are gaining more interest from buyers, helping sellers to provide the necessary information to speed up the progression of a deal. Furthermore, due diligence is made incredibly easy with bulk upload features and complex user-based or group-based permission settings. If a member on either the buyer’s side or the seller’s side has a question or concern about certain documents, users can implement the Q&A function to promote smooth communication and collaboration between all parties. A VDR acts as a repository for all types of information necessary for seeing a deal to its completion.
Corporate Document Sharing
As communication has made an evident and necessary transition to the online realm, having a secure space to share documents and collaborate with coworkers or clients is vital for any successful business. From storing corporate minutes for future reference to securely sharing company financials and intellectual property – a virtual data room is invaluable to ensure that your confidential company data is impenetrable to malware or unwanted third parties. This type of platform is also useful for basic communication between teams or clients as opposed to email correspondence which can quickly become messy and convoluted. Not to mention the insufficiency of generic document sharing platforms, such as Dropbox or Google Drive, to maintain a high level of security for large scale and high-revenue transactions. Virtual data rooms allow companies to remain organized while still cyber safe with their information without having to build additional extranets.
When it comes to handling confidential information, a virtual data room helps lawyers establish a trustworthy relationship with their clients. Organization is vital in an industry with large volumes of documents – virtual data rooms offer control features that allow clients to categorize their documents appropriately and opposing council to find it easily for their review. With watermarking and the ability to revoke document access, only privileged third parties are permitted to view this data. During an already arduous and time consuming process such as litigation, a client’s mind should be put at ease knowing their important information is behind iron-clad security and constantly under their control.
Other common uses
While these are the most frequent uses for virtual data rooms, they are by no means the only ones. Virtual data rooms are commonly used for projects as diverse as investor reporting, corporate restructuring, fundraising, financial auditing, intellectual property management, preparing for IPOs, and much more.
Firmex is a relatively new member to the virtual data room world, but has made a name for itself since its founding in 2006. In the 12 years that they have been active they have worked alongside industry giants such as Deloitte, CIBC, Good Year, KPMG and over 100,000 more companies worldwide that have trusted them to securely share their data. Their aim is to make complex processes simple and quick for busy professionals and large-scale transactions without any hidden fees in their subscription or single-use pricing. These aims have undeniably gained Firmex its notability within the VDR community and continues to establish this provider as a worthy adversary to legacy data room providers.
Firmex has designed a platform that is intuitive, easy to use, yet still provides complex permission settings and intricate features to ensure that their clients have the utmost control of their data. A few notable] features include email in, “view as”, and the ever necessary dynamic watermarks for confidential information. Firmex also ensures that all data in transit and at rest is secured with 256-bit AES SSL/TLS data encryption and that they obey internationally recognized compliances such as HIPAA, SOC 2, and others. This provider prides itself on the ability to keep your data impenetrable while also facilitating smooth transactions between your company and external third parties so that deals are closed quickly and successfully.
Intralinks was founded in 1996 and is one of the leading technology providers in the virtual data room market. They are a New York based company, however, also have offices in Europe and Asia, allowing for a broader range of their secure document sharing services for large-market deals and transactions. A few of their notable clients include Panera Bread Company, Whole Foods Market, Starbucks, and Essar Oil.
Intralinks, like any other virtual data room provider, claims to offer their clients exceptional security as well as control of their confidential data with features such as document watermarks, email alerts for new uploads, and Q&A functionality. Intralinks is one of the most expensive VDR providers on the market despite providing fairly standard features and having a bloated interface. Their pricing structure is better matched to higher revenue deals and can be a bit tedious for those working in the mid-market range.
Merrill Corporation has made a prominent impact on the growth of the virtual data room industry since their founding. As a legacy provider, they offer similar services to others, however at a steeper price and cater specifically to higher-revenue sectors such as litigation and M&A. Furthermore, they operate world-wide, performing upwards of 6000 deals annually, and guarantee no hidden or additional costs for their data room. While their clients aren’t listed on their site, Merrill provides services common amongst most virtual data room providers – complex permission settings, Q&A, 256-bit SSL data encryption. However, they fall short with the level of control with their permission settings; an administrator cannot view files or folders as a specific user and can only set them on a user-based level, not group-based. Their level of features doesn’t really seem to match the price they charge.
RR Donnelley’s Venue
RR Donnelley has been operating since 1864 before they made the inevitable transition to also becoming a virtual data room provider with Venue. With this service their focus is mostly high profile and complex deals with notable clients such as Deloitte, GE, and IBM. Venue is designed to offer its clients and easy-to-use platform with features to aid in arduous and time consuming deals that involve large volumes of documents. A few of these features include bulk printing for files, an expiry date filter to stay aware of the status of projects, and alerts for any changes that have been made within the data room. Awareness is key to success and that is what RR Donnelley attempts to provide with their VDR. However, their interface is dated, slow with processing times and it is unclear how much control an administrator has with their documents once they have been uploaded to the room.
ShareFile was founded in 2005 and since then has taken pride in offering document storage services for both small and large businesses. They offer flat-rate pricing for standard features such as dynamic watermarking, view-only access that ensures the administrator total control over their documents, and reporting that shows a click trail of activity within the virtual data room. While ShareFile does assist in complex deals like M&A, they straddle the line between a premium virtual data room and a generic document sharing service. A potential client might have to compromise on the security level for the lower-end annual price and so this VDR is better suited for small scale projects.
Ansarada has been active in the virtual data room world since 2005, having been founded in Australia and worked their way to world-wide recognition for their services. They have worked with clients such as J.P. Morgan, Barclays, and Deloitte and take pride in offering speed and security to the over 20,000 deals their have closed in the past. Their data room is designed to assist more specifically M&A deals and their features to facilitate a smooth due diligence process. A few features that offer this level of efficiency are document watermark customization, the ability to disable a deal at a certain time and to edit documents even after they have been uploaded. Due to this, their pricing is on the higher end and not necessarily appropriate for clients in industries other than M&A.
Brainloop’s Secure Dataroom
Brainloop was introduced to the virtual data room game in 2000 and has made industry strides in providing an easy-to-use and effective platform. Its services are designed to cater to M&A due diligence and outlicensing projects, making it a bit less effective for general corporate functions that require the simple sharing and storage of documents. A few of their basic features include complex permission management, automatically generated watermarks, and Q&A functionality – standard for most providers who try to ensure that data remains secure once uploaded into the VDR and easy for collaboration. While their client base is diverse, they do not offer a clear breakdown of their pricing structure on their website, so you will have to contact their support team directly to figure out if their services are right for you.
DRSdigital A.G.’s Drooms
Drooms was founded in 2001 by legal and M&A specialists in Switzerland, but also have offices all around Europe that have assisted in over 300 billion euros worth of transactions. A few of their past clients include Deloitte, E&Y, JP Morgan, and Credit Swiss. They aim to provide an easy-to-use platform that optimizes due diligence processes with advanced permission settings, detailed reports, and are compliant with European protection legislation. While they offer support for various industry transactions, Droom specialize in real estate deals and do not seem to be expanding their offices to North American market any time soon.
BMC Group’s SmartRoom
BMC Group established their Smartroom to host a variety of deals and transactions with “greater efficiency and maximum security”. Their platform’s versatility has assisted companies such as citi, Coca-Cola, GE, and HP with everything from M&A to content sharing streamlining through features developed to facilitate smooth due diligence and provide ultimate control. Smartroomoffers its clients the ability to restrict view, print and save abilities of individual documents, advanced reporting and alerts of activity within the data room, and a secure link to share documents safely and with ease. They also have a dedicated project manager to help you along your transaction and to ensure that everything runs smoothly. Unfortunately, Smartroom does not offer a price breakdown on their site so you will have to contact their support team for those details.
Box has assisted over 41 million users since their start in 2005. They offer services for common document sharing needs, but have also worked with clients such as P&G, GAP, Allergan, and Whirlpool. They claim to offer easy of use as well as heightened document security with their email-in option, access expiry, and reporting feature, allowing clients to stay aware of the activity of files and folders within the data room. Unlike a few of the legacy virtual data room providers, Box is on the lower end of the pricing scale which is feasible for mid to large businesses. However, the simplicity that Box offers comes at a down fall because it is not always as capable when handling incredibly complex deals. They cater more to individual usage, much like a generic document sharing service, and aren’t as equipped to handle the arduous transactions that come along with M&A.
MergerTechnology Pick: Firmex
There are a lot of quality virtual data room providers, Firmex stands above the pack for offering the best combination of innovative features, reasonable pricing, versatility, and high quality customer service. As one of the few providers who focus solely on virtual data rooms, Firmex put all of their attention into their product, and it shows. They’re also new enough that they avoid the trappings of older, bigger players like Intralinks and Merrill, but they have enough experience under their belt that they’ve worked with nearly as many big customers and you can trust them to handle your case with expert care.
Top 3 VDR Providers
Firmex has time and time again proven themselves as a virtual data room provider that offers their clients ease and efficiency at a reasonable price without compromising the security of their platform. Their innovative features, such as ‘view-as’, paired with a clean, user-friendly interface allows for the simple uploading and sharing of confidential data without the threat of interception or the collaboration of unwanted third parties. Firmex’s permission settings are complex enough to securely store large amounts of data for a variety of industries, yet the software is simple enough for a new client to quickly comprehend and utilize to facilitate a seamless closing of a deal or transaction.
#2: Merrill Corp
Merrill Corp’s virtual data room is a sufficient choice for clients unconcerned about their higher than average pricing. The company has been around for a fairly long time and they offer a range of features to aid in complex and high-revenue transactions. Because Merrill has designed their VDR to assist in certain industries more than others and their interface can be somewhat bloated with unnecessary functions, this is why they rank second on our site. Versatility and affordability are vital for many clients, and Merrill isn’t the best provider to turn to for those qualities.
While Intralinks is the most established virtual data room provider on the market, they are also the most expensive. They cater to high-revenue deals and aren’t as inviting for mid-market clients looking for basic document storage and sharing with exceptional security. Much like Merrill, their interface is bloated with unnecessary tools, making it difficult to navigate through during already arduous projects. Intralinks’ VDR ranks third on our site because of its notability, but also because of its inflexibility towards mid-market deals and transactions.
Finding The Right VDR For You
The process of finding the right provider for your company’s needs can be tedious if you aren’t sure what to consider when searching. Every business’s needs are different, so ensuring that you are utilizing a service that best suits your endeavours is key in performing smooth and quick transactions. Becoming and remaining successful in your field is difficult enough without the constant threat of malware and inevitable disorganization that come along with generic document sharing services, which more effective for small scale storage and sharing.
What to Look for?
For professional industries, or even small start-ups building their business, a virtual data room acts as a stepping stone to engaging with and securing clients presently and in the future. Don’t take the decision of a virtual data room lightly and read our suggestions below for what to consider when making the choice.
The most important factor of a virtual data room is the level of security it can provide over alternate methods of document sharing. An efficient VDR offers encryption for data at rest and in transit and is known to use the same data centres as financial institutions. Features also play an important part in the security of the overall data room since a big threat to documents’ confidentiality is the access of unwanted third parties and information leaks. Providers optimize the design of the VDR to ensure that only privileged users are able to view certain documents through complex permission settings and the ability to manage these settings is simple and intuitive for the administrator. Furthermore, successful VDRs obey internationally recognized security compliances and ensure that your data is treated accordingly with regards to those expectations.
The features within a virtual data room are designed to help an administrator maintain control over the documents that are uploaded and user’s ability to view them. Without this control and level of organization clients might as well just send their documents out into cyberspace via email; unsure of where it’ll end up and unable to keep it in order when constant communication is occurring. In a VDR the administrator has the capability to assign permission settings to users or groups, ensuring that they can only see what is necessary for each deal. Furthermore, once documents are uploaded onto the platform and shared within it, an administrator can choose to revoke access to these documents whenever they see fit or apply identifying watermarks to discourage unauthorized sharing of the information. From the moment a data room is opened for a client to the minute the deal closes, they should be afforded as much control as possible over their confidential information, and virtual data rooms are equipped to do that.
As mentioned above, not all virtual data rooms are made equal and that also applies to their pricing structures. Legacy VDR providers cater to higher revenue deals, while newer, more affordable ones offer services for various types of industries. It’s important to understand the amount you are prepared to pay for the services you need so as to not fall victim to overpriced platforms with bloated and antiquated interfaces. With an increasing variety of providers there’s enough to choose from and hopefully find the right one for your business needs.
How To Stay Cyber Safe When Sharing Documents Without A Virtual Data Room
Are you still not convinced about the importance of virtual data rooms for securely sharing documents online? When dealing with your own or a client’s confidential data, the last thing you want is for it to leak or end up in the wrong hands and seen by the wrong eyes. A virtual data room goes through great measures to promise their customers safety and control so that they have peace of mind when going about unavoidable processes. It goes without saying that the online world is inescapable at this point in time, so rather than hope everything works out well when sharing online, the software provided should be used to its full potential so that you are never left disappointed or regretful with your decisions to upload information.
However, despite the continuous growth of cyber threats, malware, and phishing we know that not everyone wants to dive right into paying for a VDR subscription, especially if they don’t work in any of the aforementioned industries that necessitate the software. While ensuring that your confidential documents remain safe and out of the hands of unwanted third parties, there are other measures an individual and a company can take to promote better security of their data. This can be done through software, by finding the right free platforms to help you store your information with relative security, or by practicing certain habits for favourable results.
Below we have outlined a few of these behaviours and platforms that an unsure client can use to understand the importance of online security before moving over to a virtual data room for higher-level transactions. These can also be used in conjunction with a VDR for optimal control over the security of your documents.
Shred Confidential Documents
Many companies can get in the habit of holding on to physical documents, either of their own confidential information or that of their customers, and this is a major threat to their security. Crumpling up a piece of paper and tossing into the recycling bin isn’t enough to ensure that whatever is on it won’t be seen by unwanted third parties or end up in the hands of someone looking to do severe damage to you or your client’s company. A good habit to practice if and when physical documents are needed is to shred them as soon as they are no longer relevant to your uses. This applies to a small business out of your home as well as a corporation with hundreds of employees – these methods of security should be taught, practiced, reexamined every few months to ensure that everyone is properly trained. It only takes one oversight of a process for vital company information to be accidentally leaked and be detrimental to the protection of your data.
The act of printing documents can be overlooked as a security hazard primarily because it is such a common practice among companies, big and small. Printing is an easy way to share documents with others in close proximity, but also an easy way to loose track of them, especially when in a big office with a lot of activity. After a document with confidential information is printed anyone can accidentally or intentionally take it, leaving that information vulnerable if not retrieved. A sufficient method that companies use to combat this issue is by offering key card access to printers so that only the specific employee can have access to the documents once they are ready to be printed. This avoids any complications if multiple people are printing at the same time and ensures that the document won’t be left out and exposed if it is forgotten after it has been printed.
External Hard Drive
Physical documents will still be a necessary factor for companies in the foreseeable future, however, many are moving towards strictly digital sharing with tools such as USB sticks and portable external hard drives. For those who are uneasy about sharing their confidential data online via document sharing services can cut out the middle man and keep all their data on a drive that can be given to whoever needs to download specific information. The advantage of using this system is that you know where your information is at all times and can physically take it with you wherever you go. However, a disadvantage is that without an equally secure backup of the information it can be lost if the drive is ever broken or stolen. It’s important to weigh out your options and recognize whether a drive of any sort is sufficient enough to hold your classified data and if the risk of the drive being lost or damaged is low.
Password Protected Files
For those who are concerned about the security of their documents or folders, but haven’t made the move just yet of investing in a virtual data room, then encrypting them could be a better option than nothing at all. Windows allows for their documents and folders to be password protected so that they can’t be accessed by just anyone. This is incredibly useful when sharing data via email or other insecure online sharing methods. While this doesn’t offer the level of encryption that makes documents impenetrable, such as VDRs, it is an efficient alternative when also used in combination with a flash or hard drive.
Google Drive is a fallback alternative for anyone that needs a quick way to upload documents to share with friends or family – vacation photos, school projects, etc. What makes this platform efficient is the fact that many internet users browse through Google Chrome, which easily connects your account with Google Drive to make the experience seamless and quick. Much like a virtual data room, Google Drive offers bulk drag & drop uploading, however, the interface is not as intricate as one would find on a VDR. Google Drive is designed for basic users in mind, whereas a VDR is more cognizant of experienced users and their expectations when they enter a platform designed specifically for this type of use. Navigating multiple platforms and understanding their intricacies can be quite intimidating, but Google Drive is a good place to start for small scale document sharing and storage.
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