data room checklist

An A to Z Virtual Data Room Checklist

Aug 03, 2021

Virtual data rooms have become an essential tool to help facilitate a round of fundraising, an upcoming M&A transaction, or simply properly organize important information within a company. Today’s market is blooming with various options to suit every taste and budget. So how do you find the right fit?

This data room checklist will show you everything you need to know when choosing a VDR provider. Let’s dive in!

What to look for in a VDR vendor: A detailed data room checklist

Virtual data rooms have dozens of features that can streamline your financial transactions, due diligence, or M&A activities. Some of them are a must to complete transactions, while others, on the contrary, may complicate your experience and drive up the price.

This is why you need a detailed data room checklist that will come in handy during your VDR selection process.

✅ Quick setup

Companies usually refer to VDR providers to expedite their deal processes; that’s why quick and easy setup is a must. Usually, to get your data room up and running, you need to:

  • Create groups and add new users
  • Set permissions
  • Upload documents and files

Some VDR providers can offer you customer support and training to streamline the setting up process. Others are pretty intuitive, letting you do everything on your own.

✅ Ease of use

Performing basic tasks like uploading files, inviting users, or viewing documents should be as seamless as possible. This is why an intuitive and easy-to-use interface is one of the crucial aspects when choosing a VDR. A nice virtual data room will allow you to:

  • Drag and drop files
  • Make bulk uploads
  • Open multiple documents simultaneously
  • Sync folders from the cloud
  • Change languages

These features are essential for VDR handiness and directly affect the time you spend completing a transaction.

✅ Ease of access

A virtual data room should guarantee easy access to your company’s sensitive files wherever and whenever you need them. This includes being able to access them from your mobile device. 

Using VDR applications will allow you to efficiently carry out your company’s business and financial transactions on the go using smartphones or tablets. It means no restriction to the office space or working hours. So don’t forget to check what VDR providers from your list offer mobile applications.

✅ Security

Security is the main reason why companies refer to VDR providers in the first place. But what exactly does security mean? Primarily, a reliable VDR provider should comply with international security standards such as ISO 27001, SOC2, GDPR, and HIPAA (for the healthcare sector). 

To secure your sensitive data, VDR vendors should also:

  • Use encryption protocols
  • Offer a two-step authentication process during the login
  • Alert you of any suspicious activity (e.g., screenshots taken)
  • Provide granular access

A high level of security is what makes VDRs different from regular document storage and file-sharing tools — so make sure your provider addresses it correctly.

✅ Data control and protection

A virtual data room should allow you to assign user roles and set permissions to control who can access your files. It will help ensure that your employees, partners, or investors can only access the pertinent information. A huge plus is when a VDR allows you to: 

  • Check who is viewing what and how often
  • Restrict what a user can do with a file (e.g., view only, edit, print)
  • Revoke access (in case of error of user rights)
  • Detect, block, and report screen capture 
  • Apply dynamic watermarks

All of these features are essential to ensure document protection and mitigate the risk of data leakage.

✅ In-room communication

The in-room communication feature allows you to reach out to other users within a single VDR platform, so you won’t need to refer to other third-party tools. It can be as simple as opening a chat with another user or posting a question related to a specific document.

In-room communication can save you time and also diminish data leakage chances.

✅ Reporting

Reporting is a nice feature to have when you’re dealing with large volumes of data. Some VDRs offer real-time reporting based on the filters you choose (e.g., user activity, documents viewed, etc.) Others create customized data room activity reports and have them automatically delivered on defined recurring schedules. The kind of reporting you choose depends on your business needs and the activities you want to monitor.

✅ Pricing

This one is very relative since every company decides its VDR budget. Generally, VDR pricing is based on:

  • Storage size
  • Number of users
  • Number of documents (per-page pricing)
  • Features you choose
  • Flat rate

To be on the safe side, always check the contract with a VDR provider thoroughly and ask questions to avoid any hidden fees or unexpected issues (e.g., a deal takes longer to complete than anticipated).

✅ Support

Easy-to-reach customer support is what makes VDRs stand out from other cloud storage solutions. Most VDRs offer free 24/7 customer support, but some may also require additional fees. So don’t forget to check this box in your data room checklist to ensure that you and your clients enjoy a high level of service even if issues occur outside of regular business hours.

Summing up

Selecting a VDR that caters to all your business needs is not an easy process, but you can simplify it significantly by using a data room checklist. Some providers may offer their custom checklists where all you need is to compare VDRs from your list.

To get a better idea of any provider, start a free trial and try navigating through their systems. It will help you choose the one that offers the services and features you need to carry out your company’s operations successfully.