3 Tips from Virtual Data Rooms Providers
Updated on November 17, 2022 | By Priyanka Tomar
Virtual data rooms provide a streamlined and convenient space for storing and sharing confidential corporate information. Investment banks, private equity, and venture capital firms, law firms, ICT firms, and M&As can all benefit from data rooms. Here are three tips virtual data room providers give to help you leverage the capabilities of the solution:
Know What You Want
Virtual data rooms are designed around specific businesses and industries. Some providers cover multiple sectors, but there’s a limit to the feature set. You should know what your business needs to find a data room with the ideal set of features. The goal is to avoid paying for features you might not need and focus on the core of your business.
Data rooms have various sections, including corporate documents, capital stock/securities, and financial/tax matters. Intellectual property, litigation and dispute resolution, property and assets, insurance, and employee matters are also part of comprehensive data rooms.
Legacy providers may have data rooms packed with features you may or may not need. Determining what your business needs will help you choose data rooms that best fit your operations and requirements. Keep the following questions in mind when searching for virtual data room providers:
a. How Long Do You Need a Data Room?
You should consider how long your deals take and how many projects your business handles annually. Some contracts are quick, while others involve lengthy due diligence and can take several months. Determine whether a single-use virtual data room will suffice or if you’ll need an annual data room subscription. Any business with a couple of deals or more per year should subscribe to a yearly plan that accommodates multiple projects.
b. How Many Documents Do You Intend To Store/Share?
Each project/deal has unique paperwork and collaboration requirements. You’ll need increased data storage if the deal requires sharing more documents. More storage could mean a higher price because a high volume of documents calls for advanced organizational features. You’ll need to sort, search, and auto-index the documents and provide robust security, reporting, and auditing features. Analyze deals to identify all documents you might need.
Find Your Core Features
The second tip virtual data and deal room providers give is to identify the core features needed for different projects. Data rooms offer unique features to support a wide range of deals and projects, but no room suites all businesses. You should find data rooms that align most with your organization to leverage optimized features. Consider the level of data control, supported file types, dynamic watermarking, collaboration features, and customization tools.
Data rooms should feature all the resources you need to store and share confidential project information and manage complex operations. Choose a data room with a comprehensive audit trail, active analytics, bank-grade security, and an intuitive user interface. You can also review the set-up requirements, organizational tools, cloud infrastructure security, integration options, and inter-document hyperlinking. Make sure the core features are present in the room.
Review Your Plan and Budget
Virtual data rooms are cost-effective but the pricing models vary based on many factors. The number of users, document volume, project duration, and feature set can influence how much you’ll pay. Most plans are flexible and scalable, so you can expand or downsize to fit your needs. Set a ballpark budget for reference and find estimates from providers. Consider the length of your standard projects and how many users will access the data room.
Data rooms offer flexible plans, so you can have a room featuring an administrator and a few users. Adding extra users will usually cost more. Determine the number of administrators and quests in each plan and how many more you can add to the room with additional charges. You should also review your storage needs, the number of documents, per-page pricing, and plan features. Some projects have many unknown variables and may benefit from flat rates.
Working with Virtual Data Room Providers
Deal room providers have various plans, including single-use, monthly subscriptions, annual plans, flat rates, and more. Each plan has unique merits, features, and costs. Leading virtual data rooms offer higher minimum storage, no limit on the number of users, and a flat rate pricing structure. Choose providers known for transparent pricing options with no hidden fees.Data rooms have many benefits if you find a reliable portal with features optimized for your industry. Working with leading virtual data room providers gives you the best chance of maximizing the investment and streamlining your deals. Stick to legitimate data room providers with a clean track record and happy references and clients.