M&A lawyers quickly become accustomed to the large volume of documents that need to be reviewed. Gigabytes of data are systematically and meticulously analyzed; the wording, numbers, deadlines, obligations, etc., are scrutinized.
Not so long ago, a deal was preceded by a buyers’ lawyers going to the seller’s office to look at all the documents required during the due diligence process in a separate room. Technology has made it possible to speed up the work by exchanging electronic versions of documents. You can send the requested files via email or cloud storage services.
The problem with both options is security. Some people may not know it but sharing important documents just by mail or dropping a link to Dropbox is unsafe. In this post, let’s look at a useful technology that solves these problems. We’re talking about virtual data rooms.
Definition of a Data Room
A virtual data room or VDR is a virtual data repository that allows you to share data with third parties by setting up access rules. It allows you to set different access rules for different participants and project teams. Users can log in with a username and password that carry information about themselves and their available permissions.
A virtual data room is an online database used by a company to keep and share confidential information. It comes in handy during monetary transactions. This procedure also stands out for the type of digital repository and the system of preservation of documents. The fast pace of business organizations asks for changes. Specialized software for business continuity has become an integral part of companies concerned about their security. It is for this purpose that they use a secure electronic data room.
At the moment, more and more companies are looking to avoid paperwork and go online. If you are also looking to move your business online, follow this link https://data-room.ca/ and take advantage of our advice.
What Are the Data Rooms?
There are two groups of VDRs on the market.
The first group can include the three most well-known and best data rooms: Merrill Data site, RR Donnelley and Intralinks. All three companies have extensive experience in M&A, and the solutions they offer are feature-rich without sacrificing security. They also allow you to download and store large amounts of data.
The second group includes data room vendors: SecureDocs, V-Rooms, and Ansarada. These systems are more user-friendly and relatively inexpensive.
Both groups of virtual data room providers have the priority of security. For example, they all comply with the “gold standard” for electronic financial transactions — 256-bit AES SSL encryption and require multi-factor authentication.
Some modern VDRs also include an undo process for the document being viewed, which allows the owner to change access rights at any moment, even if another user has had time to download the document. There are options to install dynamic watermarks that will be reflected on every VDR file and can store information about the date of download, the name of the project, and even the name and even the IP address of the person who downloaded the file.
How to Choose a Secure Data Store
There are several factors when choosing data room software. We recommend looking at these 3 points.
Price. Data room service providers set prices based on the functionality and time spent in VDRs. Law firms specializing in mergers and acquisitions can afford their data rooms.
If a company needs a VDR once, it’s better to use services that provide storage based on the amount of time. When a business plans to use the software regularly, it is better to purchase a subscription for many transactions per year.
Convenience and functionality. Here you need to consider the format of files the system can work with, whether you can download zip, and what OS it is available on. If you work with international transactions, it is important that VDR is open round the clock and supports several languages.
Security. Selecting a vendor who stores all the data is important rather than giving it to subcontractors. It is also important to study the reviews of real customers. This information will help you learn more about security. Some sites compare the functionality of VDRs. With their help, you will learn a lot of useful information.
How to Protect Business from Data Leaks
Classic data room services offer a standard set of tools such as viewing documents, downloading, sending for printing, sharing, etc. File protection within VDR is achieved by differentiating user rights, controlling document lifetime, and logging events. But the question remains – how to ensure the information will not leak into the public domain and how to identify the culprit in case of leakage.
You can put watermarks on documents when exchanging them with your contractors. There is also a protective grid, which is superimposed on the text when you read it.
Another way of protection, based on the latest technology, is invisible marking. Unlike the previously mentioned options, a different approach is used here. Changes occur at the next level but remain unrecognizable to the naked eye. Due to the shifts that occur in the document, each copy is personalized. Thus, in the event of a leak, it will be easy to determine who exactly is the source of the leak.
Convenient Use and Security of VDR
Virtual data rooms are the servers where the information is stored and are well protected against hacking. They have unique security protocols that “shield” documents during cataclysms.
The latest security protocols are used to transmit data and be the most secure. But that’s not all the facts about the reliability of the design. When you give someone access to documentation, you completely regulate their actions. The user will have to go through two stages of specialized tasks.
But before placing your order, you can test the developers for free. Don’t put off upgrading your business until tomorrow. Test out the best features right now.