Step-by-step Guide to Choosing a Virtual Data Room in 2022

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Undoubtedly, you have heard of virtual data rooms (VDRs), and perhaps you have even used one.However, identifying the virtual data room that is the best fit for your business and documents is not as simple as doing a Google search and scanning through a few reviews.The legwork behind VDR shopping is of the utmost importance, and while it takes a bit of time, it does not have to be complicated and will surely yield positive outcomes for your business and its Virtual Data Room.At FirmRoom we help companies utilizing data rooms and make this process as easy as possible, and in this article we simplify and fortify the process of selecting a virtual data room.The article below will go into detail on each step so you can confidently navigate the VDR waters. So, let's start!

1. Define your needs and abilities

Before you can begin talking to colleagues and going down the rabbit hole of VDR reviews, you must hone in on what you will use the data room for and how it will enhance your current practices.Additionally, you need to honestly analyze your (and your peers') abilities related to technology.As you take stock of the potential users' capabilities, you will be able to continue to refine your VDR criteria. If not everyone on your team is technologically savvy, you will want a VDR that is known for being intuitive.Additionally, customer service and support might become more of a priority for you vs. a company of employees that are very technologically astute.The following are basic questions to begin with as you work to define your needs:Step one should organically help you create a set of criteria for your optimal VDR.With these criteria in mind, you now need to determine the features that will best address your business' unique goals.

Some VDRs are simply just VDRs - a secure place to store documents, while others contain features that promote collaboration, due diligence, and still others go further with project management features.

Features commonly fall into the following categories:

Security is obviously of the utmost importance when selecting a VDR. Compromised documents not only hurt deals, but can also destroy companies and their reputations, putting thousands, or even millions, of individuals' information at risk. As you shop for a VDR, eliminate any one that is not ISO 27081 compliant. Similarly, eliminate options that do not have two-factor authentication to reduce password theft, strong encryption methods to keep documents safe, and digital watermarking abilities to prevent illegal copying. Additional details about security features can be found in this virtual data room security article.Document management features. Some Secure Data Room allows teams to not only store documents and files, but also includes in-text search, built-in document and excel viewer, various filters and more.

Permission settings. On a related note, permission settings are critical to explore when shopping for a VDR. More specificity, does the VDR have "view only" options? Will it allow you to share a document with a peer, but also restrict part of that document from your peers? The specifificty of permission settings varies from VDR to VDR and can impact your collaboration and document safety.QA feature. The QA feature goes by many different names but it is essentially a way to request diligence or additional documents and files within the platform. It is outdated feature as there are more convenient ways to manage diligence process. Consider investigating DealRoom's diligence management capabilities if you really need to streamline your diligence process.Analytics (also known as "audit logs"). You will want to look for a VDR that provides data on all users, activity, files, and documents within the room. This is not only useful from a security point of view, but also from a project management perspective as it allows you to identify potential roadblocks, gauge users' levels of interaction, and avoid redundant work.

Customer Support. Finally, be sure customer support is on your shopping checklist. Perhaps even chat online with customer service or call the customer service line to gauge how responsive the VDRs customer support is. Also, if you are using the data room across different time zones, you'll want to look for 24/7 customer supportYou can find a complete list of features for each category by reading the article "Advanced VDR Features that Data Rooms Should Have"

3. Consider your budget

VDRs can be very cost-effective, but their pricing models do vary. Before you begin your hunt, be sure to set a ballpark budget as this will help narrow your search.Additionally, you will want to consider the length of your project (or if the time frame is unknown, this should also be noted) and the number of users your data room will have.

Generally, VDR pricing is based on either:

• Number of users - some providers only allow for an administrator and a few users, and each additional user can cost upwards of $100. As you shop, you will want to consider the number of users you will have (administrators and quests) as well as the number of users allowed in each VDR with additional charges.Storage size - storage size pricing is not ideal for most users as this means the room charges based on the number of Data Room (GBs) purchased. The overage charges for these rooms are historically high; however, if you have a small project with a limited number of text documents, this might work for you.Number of documents (also known as "per-page pricing") - although becoming a bit outdated, a per-page pricing method is still used by many VDRs. This means they charge about 40-85 cents per page. Again, if you have a very small, well-defined project, this might work for you, but if you have a larger project or a project with unknown variables, per page pricing can often lead to additional charges and difficult, even compromised, decision making when it comes to what will go into the room.

 Available features - different plans provide different features which can affect cost.A flat rate - larger projects with many variables usually fit well with flat-rate pricing. Oftentimes, this means the VDR provider will charge a monthly fee that includes unlimited pages, users, and some amount of storage. This type of pricing can help with financial planning for your project, as well as help your company avoid surprise or overage chargers. The current trend seems to be toward more VDR providers moving to a flat rate pricing model, but be sure to fully investigate what the flat monthly fee covers for each VDR you consider.