Finding a quality virtual data room provider should not be challenge now that virtual data rooms have gained global acceptance. However, the popularity of virtual data rooms, now used in the majority of mid to large M&A transactions, means that providers are a dime a dozen. They may be easy to find, but how do you decide if your prospective provider will be a good fit for your enterprise? There are five basic questions you can ask in order to make sure your deal documents are in good hands before signing on the dotted line.
1. Who are you?
As in any relationship, the personality of your virtual data room provider must be a good match with your own. Who are your provider’s shareholders? Are they part of an established group? Data room providers who already have a strong, stable corporate backing offer greater levels of security than startups. What is their management team experience, track record and tenure in the company? Above all, you want a provider who’s been around for long enough to know the ropes, and whose clients offer recommendations for their services without hesitation.
2. What level of service do you offer?
Depending on the needs of your enterprise, you’ll need to decide on a provider who delivers either self-service (similar to the hands-off approach offered by Dropbox), full service, or somewhere in between. For providers with full-service support, what types of coverage are they really maintaining? Standard business hours help only, or 24/7 availability? What kinds of people will be working on your projects? Are you provided with a dedicated deal coordinator, or do you speak with whichever customer service rep answers the phone first?
3. How secure is your technology?
You’re trusting this data room provider with valuable information, so be sure to verify the security of the dataroom service prior to committing to them. What security certifications do they hold (SAS 70, ISO, etc)? Are their services and certifications in use by respectable organizations? How do their security policies measure up to the industry standard, and what types of protection or solutions do they offer in the event of a breach?
4. What is your pricing structure?
You want to have an idea of the budget you’re committing to, so be sure to ask your potential provider how their fee schedule works. If they go by usage fees, charging per MB or page, are they flexible to changes? Will an inclusive, flat fee really stay the same with no surprises, or will there be unexpected overtime charges down the road?
5. What is your experience level?
How many data rooms has your potential provider done in this sector, and in what kind of time frame? How long have they been doing business? The goal is to find a data room provider who has an established reputation and has already accomplished many projects similar to your requirements, yet is still open to innovation and who keeps in touch with new technologies and trends.
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