Lawyers who deal in M & A deals (of course, not only they) quickly become accustomed to the large amount of documents with which one must become acquainted. Gigabytes of data are subjected to systematic scrutiny, the wording, numbers, terms, obligations, etc. are carefully checked. Not so long ago, the “cult-hike” of the buyer’s lawyers to the seller’s office preceded the conclusion of the transaction in order to familiarize themselves with all the necessary documents in the due diligence process in a separate room. Technologies have made it possible to speed up the work by exchanging electronic versions of documents (you still need to check the originals, but this is easier). This can be done by sending the requested files by email or using cloud storage such as iCloud, Google Drive or Dropbox. The problem with both options is security. Maybe someone did not know, but it is not safe to share important documents by mail or by dropping a link to Dropbox. In this article we will consider a useful technology that solves these problems. We are talking about virtual data rooms (who has a better translation version – offer; in the original, Virtual Data Room – VDR).
Speaking in terms of terms, then VDR is a virtual data repository that allows you to share it with third parties at the expense of access rules. Thanks to this, you can set different access rules for different participants and project teams. Users can log into the system by entering a username and password, which carry information about it and the rights of use available to it. It is security that distinguishes specialized VDR from the generally accessible ones. For this reason, for example, IBM limits its employees from using Dropbox and other similar tools.
All companies have rich experience in the field of M & A, and the solutions they offer are full of functionality without compromising security. They also allow you to download and store large amounts of data. The price of their services is quite high, since it is formed on a page-by-page basis and payment for additional users.
It should be noted that in addition to the above, there are no special differences. Both groups share security priority, for example, all of them comply with the “gold standard” for electronic financial transactions – 256-bit AES SSL encryption and require multifactor authentication. Some modern VDRs also contain a process of canceling the document being viewed, which allows the owner to revoke access rights at any time, even if another user managed to download the document. There are opportunities for installing a dynamic watermark, which will be reflected on each file loaded in the VDR and can save information about the download date, project name, and even the name and even the IP address of the person who uploaded the file.
There are several factors when choosing a VDR.
Security. Of course, this aspect will interest you most. It is important to choose a developer who himself stores all the information, and does not give it to subcontractors. Well, certification, of course. Plus reviews, customers and so on.
Price. Most developers build pricing based on the used space and the amount of time during which the VDR is open. Some law firms specializing in M & A can afford to provide their own VDR. If you need a VDR one time, use the services that will provide storage based on the amount of time. If you plan to use VDR regularly for a large number of transactions per year, then the purchase of a subscription is your choice.
Convenience and functionality. Here it is necessary to take into account the format of files with which the system can work, is it possible to download zip, on what OS is it available (Mac?). If you work with international transactions, it is important that the VDR is open around the clock and supports multiple languages. Pay attention to whether there is a free demo version.