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Advise to Selecting a Virtual Data Room & How to Spot Fakes

Taking into account advancements in technology, paired with a virtual data room’s ability to store secure information and increase collaboration, it is not surprising VDRs are (and will continue to be) the way to conduct business. From finance to mergers and acquisitions, real estate, healthcare and more, VDRs have become a staple in how people all over the world gather and share information. 

Consequently, more VDR use means more VDRs are popping up on the market and finding the right one can be difficult- especially with the escalating number of fake reviews being placed to promote specific VDRs. In this article, we examine how to identify fake reviews and other misleading VDR information to make your VDR selection a bit easier.

Unfortunately, there are quite a few fake review sites out there. According to a survey done by BrightLocal:

  • 33% of consumers have spotted fake reviews in 2018
  • 89% of consumers that are between 18-34 years old have reported seeing fake reviews
  • 74% of consumers that are between 35-54 years old have reported seeing fake reviews

The reason is simple - providers want to have a 5-star rating.

minimum reviews needed for using a product

How to spot fake virtual data room reviews

While there are serverl useful reviews and review sites, there is no doubt during your VDR selection process you will come across fake reviews meant to promote specific products. Here are a few tips to help you identify what is real and what is fake:

1. The pros and cons of multiple providers are not discussed. If the site does not examine multiple providers, this is a red flag. Additionally, if the review does not examine the pros and cons for all of the providers, it is likely the review is biased and intentionally placed to promote a specific VDR. 

2. A review that clearly favors one provider. Similarly, you should be suspicious of a review that seems to favor one provider. You might also notice this review - or similar reviews favoring this VDR - on multiple sites having been placed by the company. Formatting also comes into play here - are there reviews with similar formats, promoting this company on several sites? (Note: it is very rare for a VDR to receive a perfect five-star review.) 

3. The reviews are not from verified customers. Perhaps it goes without saying, but you will want to look for sites that require reviews to be posted by verified customers - people who have actually used the products. 

4. Lack of useful and critical information. If the reviews cannot speak to the specifics of the product (specific functions, what about the VDR was intuitive and what was more difficult to navigate), it is not only not a strong review, but also most likely fake. 

5. Poor grammar and spelling. Oftentimes companies will buy reviews from countries where English is not the native language because these reviews are cheap. 

6. All five-star reviews. Providers that have many five star reviews and a total of 5-star ratings are most likely hiding their negative reviews or posting fake five-star reviews. Again, five-star total ratings of virtual data rooms are very uncommon in the industry. Even leaders like Hubspot do not have more than a 4.6-star rating. 

7. Small amount of reviews. Be wary of sites that list only one or two reviews for each platform. This could be a sign that the site and or reviews are fake, and they do not provide enough information to help users make an informed a decision.

According to BrightLocal’s survey

Consumers require an average of 40 online reviews before believing a business’s star rating is accurate (up from 34 in 2017)

How to spot fake virtual data room review sites 

Fake virtual data room review sites are the main source of virtual data rooms customer manipulation. Online, you can find multiple sites on the top of google search results that contain the same list of VDRs (mostly in the same order) and the same statistics, which ultimately and unfairly influence the consumer. These fake sites omit many VDR providers, while at the same time offering direct links to websites for the VDRs they are pushing. Here are a few of the worst offenders:

  • https://datarooms.org/
  • https://dataroomsolution.com/
  • https://virtual-data-room.org/
  • https://onlinedatarooms.net/
  • https://dataroomproviders.com/
  • https://dataroom-providers.org/
  • etc.
fake virtual data room reviews

So, How to Choose a Virtual Data Room Avoiding Fakes?

While we cannot say with 100% certainty that all the reviews on the following sites are true, they do not manipulate consumers the same way the above fake sites do. Most of the reviews on these sites come from individuals who have used the software and have specific, critical comments to share. 

  1. Capterra
  2. Softwareadvice (show the same VDR reviews as Capterra)
  3. Getapp (show the same VDR reviews as Capterra)
  4. Trust Radius
  5. G2crowd

What are the data rooms on market right now?

There are plenty of options for virtual data room providers. Each one has unique offerings including VDR features, industry specifics, and customer service options.

virtual data room market

1. DealRoom. DealRoom is a VDR combined with an M&A project management platform. It is designed to make complex deals simple with its Agile approach; therefore, it has been utilized for billion-dollar transactions and is suitable for deals >50M where there is a greater need for diligence and integration process management. 

2. FirmRoom. FirmRoom is a traditional VDR that works well for smaller M&A deals (<50M), but has also been utilized for real estate, healthcare, finance, and law.

3. Firmex. Firmex is a well known VDR known for its strong customer support. 

4. Intralinks. Intralinks is another well known VDR. Similar to Firmex, it does not contain additional project management and M&A features

5. Merrill. Again, Merrill is a traditional VDR, but stands out due to its highly ranked data room security. It is rolling out new features that may set it apart a bit more from Firmex and Intralinks. 

6. Securedocs. Securedocs is a VDR that lacks specific M&A features and some other more basic features, such as full-text searching and the ability to track how much time viewers are spending reading/working on a document. 

7. Sharefile. Sharefile boasts flat-rate pricing - this is one of the key benefits of using a VDR. 

8. Caplinked. Finally, Caplinked is a VDR known for its clear dashboard and activity tracker. 

Some tips on how to choose the right virtual data room

Now that you know how to spot fake reviews and review sites, here is a practical blueprint for how to conduct your research and choose a VDR that is right for your business:

1. Consider your own unique business needs first.

Having this list in mind as you conduct your research will allow you to be more efficient. Are there specific features you are looking for? How technologically savvy are your users?

2. Check review sites and go through different software providers.

What are people saying about the VDR? Do specific companies seem to be planting fake reviews? A comprehensive and reputable review site, to begin with, is Software Advice. You can also use the trick of using the following format when google searching and checking the sites that appear as a result: “provider name +reviews”.

3. Check reviews about providers from their employees by utilizing sites such as Glassdoor.

4. Spend some quality time on each VDR providers’ site.

And, again, consider how intuitive the site is, as well as its visuals - these are often previews of what the software will be like. While exploring, be sure to watch demo videos and engage in live support chats so you can ask specific questions and survey the type of customer support and service you would receive if you went with this VDR.

5. Ask for a free trial.

Most of the major VDR providers will offer a free trial. 

6. Finally, talk to colleagues and see what they have used and liked. 

virtual data room free trial

Learn more about DealRoom's Modern Virtual Data Room

What Causes Deal Fever? What Raises the Risk?

There are several symptoms that can lead to the disease of deal fever. 

One such symptom of deal fever is getting carried away in the heat of the deal. There is a lot of time and effort spent just exploring a potential deal, let along the negotiations involved. Sometimes people spend so much time and effort on exploring and negotiating the deal that they feel is must get done at all costs, while failing to take a birds-eye view in determining if the deal is really the best thing for the company.

Another symptom indicating the presence of deal fever and one that raises the risk of catching it is when certain executives become more excited about the deal and emotionally involved in the outcome than other members of the group. This can lead to inflating the deal’s potential strengths instead of also focusing on potential pitfalls. In a competitive situation, sometimes certain people want to do the deal much more than others for a variety of reasons. 

Many M&A teams also use M&A software to help them source new deals. Just because a software is telling you a deal is a good idea, that doesn't mean you don't have to do the proper research.

How to Prevent Deal Fever

Great news! There are a number of proven ways to prevent deal fever and keep your company disease-free. Here are some tips to stay deal fever-free:

  • Perform More Research Than You Need To. You can never perform too much research on a potential deal, so we recommend doing even more than you think you need to.  
  • Seek The Opinion Of Experienced Deal Makers. Get another opinion from someone you trust that has embarked on similar deals. What do they think of the deal? Seeking another opinion that can evaluate your potential deal without the emotional involvement will help you ensure the deal is truly one you want to pursue!
  • Know All Of The Potential Risks. Thoroughly evaluating the deal’s potential risks, and involving your team in the process, will help you avoid deal fever. Don’t lose sight of your basic financial calculations! Involving others in the process is essential, as you want to make sure nothing is overlooked and you can remain deal fever-free. 

Resist deal fever by not overlooking the negatives that you may not want to see! If you have been the primary person working on the deal, make sure you involve others so they can help assure that you are seeing everything clearly. There should never be one person working on deal flow tracking. Likewise, don’t let personal pressures to get the deal done get in the way of looking at everything objectively. Sometimes, not doing the deal may be in the best interests of the company.

How to Tell When You Have Deal Fever

Do you have a high degree of risk tolerance? Do you have a burning desire to get the deal done, yet something just doesn’t feel right about it but you’re not sure what? If so, you may be catching a slight bout of deal fever.

Having the above feelings isn’t just exclusive to individuals, either. Many companies surveyed believe that their M&A function of getting the deal done is more important than what follows. If you’re in the M&A department, and you’re not performing M&A’s, something must be wrong, right? No, not necessarily. Inherently good deals are difficult to come by and you may have to pass on many of them before you find the right fit.

If deals contain personal agendas or emotions, or your company provides more incentives and encouragement to do the deals rather than not, than these are signs that your company may have deal fever. Recognize the signs so you can avoid deal fever and ensure you are making deals that have the highest chances of future success for your company.

Deal Fever

Treatment, Care & Medications For Deal Fever

Below are some treatment, care and medications for this contagious disease known as deal fever:

  • Treatment Option 1. Ensure your deal team is incentivized for long term success, and not just for completion of the deal.
  • Treatment Option 2. Have objective, experienced observers review the deal specs, including all of the potential negatives of doing the deal.  This way you can help ensure you’re not overlooking potential pitfalls.
  • Treatment Option 3. Let post-close executives have direct input into whether or not the deal goes through
  • Medications For Deal Fever. Create clear action steps that are to be taken when considering all potential deals. Create a set of red flags, or things to be looked at more closely when they occur. Finally, a healthy dose of objective observation by people not directly involved in the process will both help prevent and cure this debilitating disease!

A very important aspect in our guide on deal fever is to cultivate a business culture in which you have both risk tolerant and risk averse individuals on the team, with both groups having equal say. When both groups sign off on a potential deal, and it is also reviewed by an objective observer, you know you might have a winner!

sign up for deal management software

Don’t Underestimate the Power of Diet, Exercise & Rest

One of the most important ways to prevent deal fever that is often overlooked is to ensure you have a good diet, and are getting enough exercise and rest. Doing so will keep your mind and body in tip top shape, and will help alleviate some of the pressures incurred from pursuing and evaluating a potential deal. 

M&A deals are complex transactions that often go at a very fast pace and can also be emotionally charged, so ensuring you’re eating well, exercising and getting enough rest can help counteract the pressures of working on the deal.

The Takeaway

Many M&A management can sometimes lack a truly accountable leader to oversee the process. Having a great leader, coupled with the goal of long term success instead of short term, are the highlights of the best things to do to not get infected with this crippling disease. Set the criteria for success and focus on that more than focusing on doing the deal just to get it over with. Make sure your team is incentivized on long term goals and are not acting out of the fear of “what if we don’t get this deal done.”

If you and your team are currently managing M&A transactions, check out DealRoom's M&A virtual data room and project management software. DealRoom's platform also includes pipeline and integration management, which helps teams organize deals for their entire lifecycle.

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