A VDR offers both sellers and bidders during a due diligence a multitude of advantages and has established itself in practice compared to physical data rooms.
In addition to the speed, especially when involving parties at different locations, the structured provision of the relevant data is a major advantage during use a VDR.
There are now a large number of providers of VDRs, so it is not always easy to decide on a solution. We offer you the following checklist
Help to choose the right data room provider that suits you and your transaction
to be processed safely and efficiently.
Security
The security and protection of the confidentiality of all data during a due diligence is a
absolute must and should be at the top of the checklist for selecting a data room.
In particular, check the following points:
- 256-bit encryption of data both in transit and at rest in the data room;
- ISO 27001 certification of the provider and the data centers used;
- company location of the provider and location of the data center; this is the only way to ensure adequate data protection and access;
- prevented by state organizations. make sure that the company headquarters.
Security Checks for the Data Room
Reliability
In the IT environment in particular, there are a large number of young start-up companies in which it is uncertain whether the existence of the company will be secure and secure even after several years the reliability of operation is unclear. A failure of a data room during due diligence can have fatal consequences.
When it comes to sensitive processes such as due diligence, only rely on established companies that can already look back on many years of success.
Even with large companies that offer an extensive product portfolio, it is not always guaranteed that all product areas will be continued strategically and in the long term. With specialized providers, you can be sure that the company has all the resources
focused on the secure and reliable operation of VDRs.
Ease of Use
The decisive criterion for the efficiency of a data room is primarily its ease of use. Both on the seller side when filling the data room, as well as on the user side for bidders. Users can’t and don’t want to spend unnecessary time checking the to learn how to use the data room. The easier and more intuitive the data room is to use for everyone involved, the faster and more efficient your due diligence will be. Providers promise a lot here, make your own judgment by looking at the user interface of the
View the data room or even test the application for a moment. some companies offer you the opportunity to create a data room free of charge for test purposes in order to get an impression.
Also pay attention to the response times of the data room when calling up documents or lists. Poor performance can affect usability and therefore efficiency of due diligence influence negatively.
Ease of use also means that you don’t need software to use the data room or a browser plugin needs to be installed. Installation often results in time-consuming IT processes that can unnecessarily delay the due diligence process.
Functionality
Only when the first three points above can be assessed positively should you
Check the functionality of the data room. When it comes to functionality, too, you should first focus on ease of use and consider whether you actually need all the details of a function. Functionality can very quickly increase the complexity of a data room application and thus negatively affect user-friendliness.
In principle, it can be assumed that the essential core functionality of a data room is available from the established providers. Differences are particularly noticeable in the usability. Test them or have the application presented to you in a short online demo. And always weigh up between deep functionality and ease of use.
In particular, the following functional areas should be considered in your evaluation:
- Quick and easy filling of the data room via drag & drop and the possibility
- complete folder structures with many files in one step to be able to upload to the data room.
- Differentiated allocation of access rights. Can be used for different internal and
- external user groups individual access rights for viewing, downloading and editing
- set up of data.
- Document protection: Documents can also be protected with a watermark
- and will only be made available as a PDF (and not as an original file).
- Document preview: The contents of the data room can be quickly viewed directly in the web browser displayed without downloading the document.
- Security: Can specific password policies be defined and a disclaimer and a 2-
- factor authentication be activated in the data room?
- Control and analysis: Data room administrators are available reports and lists of all
- Activities available in the data room.
- Openness and export: The data room offers administrators the option of all content
- easy to be able to export in an open format? Does the provider offer archiving of the data room on a data carrier after the end of the project?
Services
The service of the data room provider also contributes to the efficiency and successful use of a data room. How quickly can the data room be provided and how quickly and
The provider supports you competently with the setup and with questions about the application.Is the service also available to your users? Can the most important application questions be clarified via online help?
And last but not least, how fair is the provider’s pricing. In the run-up to due diligence, it is often difficult to estimate the exact amount of data, so pricing based on the number of document pages offers a certain degree of uncertainty. In addition to the variable costs based on the number of users, you should also consider any pay attention to one-off, flat-rate setup fees or similar. A direct cost comparison of the different data room providers is not always easy.