eDataRoom / Virtual Data Room (VDR)
Virtual Data Room (VDR) or eDataroom is an online data room where you can store your data and share it with others. The biggest advantage of the data room is that you don't have to give control over your data to others. You can restrict the access to select people and also restrict rights to read only, read and print or read print and download.
Due diligence (DD) is a requirement of any financial transaction. However, the days of physical due diligences is almost over. Physical due diligence requires the whole team which might include lawyers, accountants, technical experts, financial consultants, investment bankers and many other to travel all the way to the seller's office to do a physical due diligence. Physical due diligence requires a big team from both sides to keep aside their regular work and work on DD. And these days each transaction have more than one potential buyer. It is very difficult for a company to have all potential buyers and their team sitting in their office doing DD of same set of documents.
eDataroom has no such physical constrains. With eDataroom a seller can easily manage multiple DD team at same time with very little effort. The buyer DD team also have the convenience of doing the DD sitting in their own offices and simultaneously with their regular work.
VDR or eDataroom is used for various purpose including:
- Due diligence (DD) by potential investors during equity funding:
Potential investors who show interest in investing in the company need to conduct due diligence on the company. The investor would like to have all possible information about the company including list of customers, intellectual properties, financial position of the company, access to key contracts of the company etc. The company looking for investors would like to guard against risk of potential investors stealing the information and then not investing in the company. In such situation they can give limited read only rights to the potential investors to ensure they are not able to copy or print any important data of the company.
- Due diligence by lenders / bankers during debt funding:
Similar to equity fund raise, in debt fund raise also a company approaches many banks, NBFCs and other lenders. Here also one or few banks actually end up lending money, but the company end up sharing the documents with all the potential lenders during due diligence. Not only lenders but also their employees including accountants, lawyers etc. get access to the documents and it substantially increases risk of leakage of confidential information. VDR protects against such risks.
- Potential bidders in an eAuction:
In an eAuction, the seller needs to share the details of the goods under auction with the potential bidders. The more the data seller discloses, the perceived risk is lower for the buyer and chances of getting better price increases. However, more data seller shares, risk of leakage and misuse increase. Only one person ends up winning the bid, however, the seller ends up sharing the confidential information with all the bidders which not only increases the risk but can also impact the value of the property under auction. Sharing information via eDataroom protects against such risks.
- Liquidation or eAuction of assets under Insolvency and Bankruptcy Code (IBC):
Under IBC, the insolvency professional or the liquidator is entrusted with the responsibility of realising the best possible value for the company so that outstanding creditors can be paid. To realise best value the resolution professional or the liquidator must approach many companies and several potential buyers / investors. The potential buyers have to do a due diligence on the company and its assets to be able to decide on the value. Many of these potential buyers can be competitors of the company or can leak confidential information. eDataroom ensure that no confidential information is leaked.
- Due diligence by a company during mergers and acquisitions:
During Mergers and Acquisitions, the company has to share lot of confidential documents with competitors who might be potential acquirers. There is no guarantee that the deal with go the full distance and hence it is advisable for the company to protect itself by sharing the information with competitors via data room so that they can maintain reasonable control on the content copied by the competitors.
- Sharing of script by a writer with potential publishers
- Sharing of portfolio by an upcoming model
- Sharing of designs by a designer
- Sharing of startup business details by a founder with potential angel investors
- Employee sharing his profile and experience details with potential employer
- During Intellectual property (IP) related discussions
- Sharing of design or other ideas for approval by an architect / designer / writer / with customer where payment is pending
- Sharing of property documents with potential buyer
Features of Right2Vote's eDataroom
eDataroom of Right2Vote has several security features which helps you protect your data at the same time make it very convenient for you to share data and for other party to access the data anytime and anywhere. Few of the security features and ease of use features in Right2Vote's eDataroom platform are listed below:
OTP based authentication: People who are invited to view the specific data room can only access the data room. Each viewer is authenticated by email or SMS based OTP (One Time Password) before he can access the permitted files.
Double Authentication: The platform provides optional premium feature of double authentication. Here a permitted viewer will have to go through two check doors before entering the data room. Double authentication can be via email OTP and Mobile OTP. Second authentication can also be biometric or Aadhaar based.
Reader Selfie: The system captures and stores the pictures of the members who access specific data room. This is an optional premium security feature aimed to ensure that permitted users do not share their access rights with others who are not permitted to access the data room. This feature is different from picture based biometric verification. Here the selfie of the viewer is not compared against picture in data base. However, it acts as a deterrent as the viewer know that his picture is being captured and hence, he will never share his access details with others.
Geo Tagging: Geo tagging is an optional premium feature where location of the viewer is tagged in the records every time, he logs into the data room. His exact longitude and latitude are noted and stored into the system.
Geo Fencing: With optional premium feature of geo-tagging, the owner of the data room can restrict or fence areas from where a person can access the data room. A permitted viewer would be able to access the data room only if he is geographically located in the approved areas. From all other areas, he would not be able to access the data room.
Audit Trail: With audit trail feature, IP address and time of logging in of all viewers and on each instance is recorded and maintained in the system. This helps in maintain a record and control of who all accesses the platform and from which IP address.
Activity Tracker: Activity tracker feature is much more intensive than the Audit Trail feature. This features records for each viewer the time they spent on each individual documents. This gives information to the data room owner that which viewer is showing more interest in which document. In a financial transaction like M&A, equity raise, debt deal, such information can be very useful for the data room owner to understand the level of interest of the viewer and from the point of negotiation.
View Only: The is a blanket feature provided during data room configuration where the admin can ensure that no viewer get anything more than a view right on any document in the data room. This is a security feature, and it overrides the specific more generous access rights provided by the data room owner to specific files. This feature is for additional safety.
View - Print - Download controls: This is the most important feature of the data room. With this feature the owner of the data room can give differential access rights over document to different viewers. The owner can configure differential rights for different documents and different people.
Watermark: For each document which is downloaded or printed from the data room, the system adds the login ID of the viewer as watermark on each page of the document. This is with the objective to ensure that the permitted viewer does not try to share the document with unauthorised viewers. It also acts as a deterrent against sharing it on public platforms, with media or others. If a document is found to be leaked and is found in possession of unwanted people, the watermark would help in identifying who leaked the documents.
Q&A: The platform provides an integrated Q&A facility on the platform. This is a user-friendly feature where the reader can raise questions while reviewing the documents and the data room owner can reply to those queries on the platform. All interaction happens on the platform and hence no data or interaction need to happen outside the platform. This not only make it convenient for the viewer and the admin but also helps in maintaining confidentiality of the document.
Group creation: This is another user-friendly feature which allows data room owner to configure different groups for different types of viewers who need to be given access to the data room. Owner can group together all viewer who need to be given similar access and hence save time during configuration.
Public / Private data room: Owner of data room can configure private or public data room. By default, each data room is kept public. However, for specific need if the data room owner wants to share the data with public at large without restriction, then he can use the public data room feature.
Right2Vote's virtual data room (VDR) is one of the most affordable data room service available for the kind of features, ease of use and security. To know more about our charges, click here