A VDR is a secure online storage of data and documents in connection with business, legal deals or legal disputes. VDR uses a central server and an extranet connection, which is an internet connection with very controlled access. This Internet connection uses a secure login provided by the relevant service provider or competent authority to disable or enable secure login at any time.
This term is also referred to as a virtual deal room.
Who and Why Uses VDR?
Initially, VDRs were only used by lawyers to meet with clients. Today, they’re also used by a wide range of professionals, lawyers, and accountants as a cost-effective and efficient way to review documents without the need for physical copies or even an actual meeting room.
The VDR contains highly confidential data and documents with restricted and controlled access when viewed, copied or printed. The specified time is scheduled for connecting and viewing documents and data. The VDR allows quick access to documents from supervisory authorities and investors. With today’s speed and efficiency of document retrieval, VDR can be profitable in a single M&A transaction.
By comparison, physical data rooms are time-consuming to manage, expensive to maintain, paper-intensive, and incur transportation costs for all users. Virtual data rooms easily allow multiple bidders controlled access and actually offer 20-30% higher bids than physical data rooms. Along with increased transaction speed and efficiency, more secure information leads to more transactions at higher prices. In a real VDR, on the other hand, the data cannot be downloaded, but can be viewed with the appropriate permissions.
VDR Vs. Cloud File Hosting Services
Okay, got it, but why don’t we all just use the popular cloud file hosting services? Have you ever received an email that said something like “We have uploaded a contract to our shared Dropbox drive”? We hope not. The big difference here is information security and general digital security, encryption and protection with full audit trail. The actual features vary, of course, depending on which VDR provider you choose and which data plan you pay for.
What Is the Best VDR?
We’d like to point out a specific company to turn to, but often there isn’t one right software solution for everyone. Depending on your budget, functional requirements, due diligence requirements, business requirements, legal requirements and all your partner’s requirements, you need to carefully review and compare the VDR solution and digital dealroom providers.
We are not particularly advocating any of the following, but if you’d like to start your research here, We’d recommend looking at the following companies and products in alphabetical order:
- BlackBerry Workspaces (WatchDox)
- Secure Brainloop data room
- Citrix ShareFile VDR
- VDR from Drooms NXG
- Intralinks VDR
- Merrill DatasiteOne
- Nasdaq Board Vantage
- Software defined access package from Safe-T
- SecureDocs VDR
There can certainly be other good ones, but this is a good starting point for your comparison and evaluation. It is also worth noting that you should look for “local” suppliers or at least choose a global supplier that understands the legal requirements of all countries involved in the business and the relevant laws.
Share your experience
We hope you found this summary helpful and learned a few important facts. If you have previous experience with VDRs and other types of offerings, be sure to share your experience in the comments below. We wish you all the best for your project and your work.