It’s 2019, and let’s face it: The virtual data room is here to stay. Since their introduction into the space, virtual data rooms have been an important tool for streamlining communication during the various stages of a deal, particularly when it comes to diligence at the end of a deal.
The state of the virtual data room (VDR) in 2019
Virtual data rooms like Intralinks and Merrill Datasite have long been regarded as the standard when it comes to optimizing deal productivity and velocity.
As we all know, virtual data rooms are primarily used in order to ease both sides of a deal through due diligence, as the final step of a deal. Due diligence is a critical step across various industries and use cases—whether it’s a matter of completing M&A deals, commercial property deals, fundraising deals, or pretty much any other type of deal.
The dreaded diligence process often dominates discussions around the value of virtual data rooms. The reality, however, is that virtual data rooms can be a valuable tool for every step of the deal-making process—from prospecting to due diligence. (More on that in a bit!)
A winning approach to virtual data rooms
As dependence on the virtual data room increases, document security rightfully remains the primary consideration when choosing a virtual data room. It’s hard to imagine an effective virtual data room that doesn’t offer at least password protection or basic document encryption. Without password protection, the unauthorized sharing of your documents is just a matter of time.
The winning strategy when it comes to optimizing virtual data rooms is pairing secure document sharing with actionable document analytics. This pairing enables you to maintain control over the documents that matter to you while also prioritizing outreach to and follow-up with prospects who are more engaged.
Let’s take a look at an example of what this looks like in the real world. Say Jessica has just kicked off the process of selling a company. She’s got to prospect, meet with, and develop relationships with prospective buyers. Using a virtual data room with sophisticated document security and document analytics solutions can accelerate and optimize each step of the process by giving Jessica a portrait of who’s interested in the M&A deal and how interested they are, and perhaps even highlighting specific areas of interest and concern.
Intralinks & Merrill: Behind legacy virtual data rooms
Legacy VDR providers like Intralinks and Merrill Datasite offer virtual data rooms that secure documents and (to a certain extent) track user engagement and performance.
Let’s start with a review of the document security measures Intralinks provides. Intralinks advertises “secure file sync and share, collaborative teamwork spaces, large-scale virtual data rooms and structured workflows.” Through Intralinks, you can provide access to encrypted materials without needed IT involvement through password protection.
Through their Insights Dashboard, Intralinks offers insights into document popularity and macro-level user activity. Using Intralinks’ Insights Dashboard, you can determine:
- Which users have interacted with what content
- Overall activity level of users and groups
- Most popular documents at both the user and group level
Merrill Datasite takes a similar approach to virtual data room security and analytics. That is, Merrill Datasite provides “role-based security access controls with real-time and future staging of permissions.” Essentially, this functionality boils down to real-time, role-based document management.
On the document analytics side, Merrill Datasite enables you to track macro-level engagement by document, user, role, and Q&A activity. You can then export data and track these findings over time.
What legacy virtual data rooms get wrong
Document security pitfalls
Even with password protection and watermarking, you’re entrusting all the business materials in your virtual data room to each viewer. When you share documents with legacy VDRs, you’re effectively hoping for the best. If you rely solely on password protection, sharing your virtual data room is as easy as sharing the password.
For this reason, viewer verification is a must for virtual data rooms in 2019. Virtual data rooms that offer viewer verification (such as DocSend—shameless plug!) empower you to require viewers to not only enter their email to access your VDR, but also click a link in a confirmation email to verify their identity. This can dramatically reduce the spread of the high-stakes materials in virtual data rooms.
When it comes to getting a general, unsophisticated feel for prospect interest, legacy virtual data rooms may suffice. Intralinks and Merrill Datasite only offer general glances at document analytics across roles and segments. These document analytics begin and end at the VDR-level; they show you which document or documents dominated prospect engagement time.
Document analytics pitfalls
What these virtual data rooms don’t give you is an understanding of where prospects spent their time in your documents. Legacy virtual data rooms offer data that stops telling the story once prospects click on a document. You can’t truly figure out what’s driving prospect interest, never mind which assets and materials are performing and which aren’t. You need to know what’s commanding their attention within that deck, proposal, contract, or other asset.
These virtual data rooms also fail to identify key deal stakeholders you may not even know about. Tracking the links that have been forwarded to someone that you haven’t engaged with yet can provide valuable insights. Specifically, you can understand what’s in your contact(s)’s (and even other company stakeholders’) domains. Using these insights, you can perfectly tailor each conversation you have to each stakeholder.
Where premier document security meets advanced document analytics
Legacy virtual data rooms like Intralinks and Merrill Datasite stop telling the story of your document analytics just when the story’s getting good. So, how you can use DocSend’s Spaces to collect actionable, insightful document analytics without sacrificing document protection?
Let’s first review the virtual data room security offerings that accompany DocSend’s Finance Plan. Specifically, the Finance Plan enables you to build lightweight deal rooms to hold all documents pertaining to a deal. With DocSend’s Finance Plan, you can:
- Encrypt documents with advanced password protection. (Click here to learn how to send and track a secure PDF.)
- Enable viewer whitelisting and viewer verification to add an extra layer of security to your links.
- Easily watermark an entire document or all the documents within a Space.
- Enable or disable ability to download files.
- Assign tiered admin roles to manage internal collaboration and permissions in a secure manner.
- Make it mandatory for someone to sign an NDA before viewing a confidential document.
Your virtual data room and DocSend
How can you accomplish this for you and your business? First thing’s first, you’ll want to get started with DocSend—your first two weeks are completely free! You’ll then want to simply create a Space and add folders and content.
Once you’ve organized all the files you intend to send, you can watermark your documents, and create links with whitelisting and viewer verification to keep your shared documents even safer than those shared through legacy virtual data rooms.
Tracking engagement with your virtual data room
Now that your documents are share-ready, you can share them and track engagement on a document-by-document (and even page-by-page!) level.
How long did each viewer spend viewing the documents in your Space? Where in your Space (and within each viewed document) did they focus their time? To whom did they forward the Space? DocSend enables you to easily answer these and many more questions. All you have to do is consult the “Recent Activity”, “Performance”, and “Utilization” tabs of a given document.
What can you do with these newfound insights? The sky’s the limit. Perhaps you decide to prioritize your follow-up with leads that are engaging with your content but not formally responding. Perhaps you decide to refine your documents and materials based on the document metrics that matter to you and your team. (Then, you can upload your revised assets and compare engagement using DocSend’s version control feature.)
However you choose to apply this data to your dealmaking approach, DocSend’s document insights give you a valuable look at engagement during the most vulnerable points of a deal.
Optimizing your virtual data room at scale
Once you’re in a groove and you’ve built Spaces into your secure document sharing flow, you can seamlessly duplicate each Space you’ve created, to personalize, secure, and track engagement at scale. (In fact, when you upload a new version of a document in a given Space, it will automatically apply it to all Spaces!)
It’s easy to see how this revised process can fit seamlessly into a number of different industries. From sales and M&A to private equity, from fundraising founders to legal professionals, security matters, and the consequences for getting it wrong are higher than ever.
At the end of the day, you deserve a virtual data room that’s not only providing this security, but also actively working to give you an increasingly refined understanding of your prospects and what they care about.