How to Pick the Right VDR for Your Deal
Virtual data rooms (VDRs) are quickly becoming synonymous with mergers and acquisitions, specifically, because of their capacity to transform and streamline the overwhelming and unwieldy process of due diligence.
However, simply using a data room platform for M&A is not enough to truly reduce workload, raise transparency, and close deals faster.
A detailed comparison of two major deal management platforms, DealRoom and Intralinks, proves all VDR systems are not created equally.
In fact, there are four major areas that should be explored before selecting one for your next deal:
- Ease of use (including agility)
- Data room maintenance
During a deal, all stakeholders should be focusing on the data and bringing the deal to completion, not worrying about the cost of the data room and its potential hidden fees; therefore, when examining the finances of DealRoom and Intralinks two key discrepancies are easily discerned.
First, DealRoom uses flat-rate pricing while Intralinks relies on per page pricing.
For example, DealRoom’s $10,000 flat-rate fee would allow you up to 100,000 pages of scanned documents.
Per-page pricing fluctuates but it can easily lead to invoices over $50,000, and can rise if you add more pages.
Not only is DealRoom less expensive than Intralinks, it also affords the opportunity for better budgeting during the M&A process.
In addition, the $10,000 flat rate fee with DealRoom permits me to upload other forms of media.
Uploading additional media with Intralinks is an additional cost.
There is also the potential for over-charging by Intralinks for things such as archiving documents with DealRoom, overcharge protection is built in to the platform.
One could even argue Deal Room’s included period of use, one year as opposed to six months with Intralinks, offers users a stronger, more flexible and economical VDR option.
The word “surprise” often has a negative connotation when it is tied to due diligence - why let surprise costs, or the inability to plan for cost, hurt your deal?
Security is most people’s primary concern when using a data room, especially for the first time.
Both DealRoom and Intralinks do a fine job with security. More specifically, both platforms provide watermarking to ensure copyright protection, the ability to restrict viewing, downloading, and printing, plus free 24/7 support.
It should also be noted, in terms of 24/7 support and security, both DealRoom and Intralinks boast strong customer satisfaction on their websites.
3. Ease of use (including agility)
Another area to explore when selecting a VDR system is how user friendly it is.
You can have the best platform in the world, but if you have to waste time and money training and retraining your staff to use it, is it really helping you?
In reality, Intralinks’ platform is not very accessible and easy to use.
Conversely, DealRoom is very accessible. In fact, it took only about 20 minutes for a new user to be trained to set up a company profile.
When it comes to basic navigation and functionality tools, both Intralink and DealRoom are on the same page. The platforms have straightforward search and filter functions, as well as indexing of site content.
An additional aspect of this category to be considered is how efficiently and effectively the system works.
Here, DealRoom wins again - its hallmark is being certified for Agile M&A, as seen through its document collection workflow and collaboration components.
DealRoom’s features allow for elimination of redundant work and total transparency, which, in turn, help to reduce deal fatigue, improve collaboration, and establish early integration.
4. Data room Maintenance
Finally, when examining data room platforms, it is critical to look at the features related to the data room’s maintenance.
Here again, DealRoom and Intralinks are very similar.
For example, both allow for bulk upload of files and folders as well as bulk printing and downloading.
Additionally, both allow users to rename and preview PDF files and to scan.
Data rooms are outstanding tools for M&A deals; however, ultimately, the comparison of DealRoom and Intralinks proves some data rooms are better than others.
With its ease of use, Agile features, and straightforward cost structure, DealRoom wins the contest when compared with Intralinks.
Selecting a VDR platform that allows you to focus on the data and close deals faster is critical to successful M&A activity, which means you need a data room that will help make your company more Agile.
Intralinks is an historically standard type VDR, but DealRoom’s commitment to Agile principles allows it to offer benefits beyond a traditional data room.