Four Important factors to consider during vendor selection
It’s important to select a provider that will make the due diligence a seamless process.
Each deal has specific VDR needs based on size of the deal, the company, and the timeline. As you're vetting your VDR options, Don’t put your clients at risk by selecting the wrong provider.
M&A deals are time consuming and resource extensie. It’s important that your vendor has platform capabilities that will make your life easier. Important capabilities your provider should offer:
- Drag-and-Drop File Upload: Your files are large and can be a hassle to upload individually. Ensure that the platform you select can effortlessly bulk-upload documents and folders with the drag and drop feature.
- Simple Permissions: M&A due diligence is confidential. You will want a platform that easily restricts viewing, downloading, and printing for specific groups in your data room.
- Full Text Search: Having a quick search bar will help you find the information or document you need by searching keywords or phrases. It’s also important to be able to do a keyword search within a document.
- Document Comments: The ability to add comments on uploaded documents will enable your team to provide feedback and ask questions easily.
Selecting a cost-effective software will save your client money and stress. Ask your potential providers for a quote based on your project’s needs. Unfortunately, many providers charge per-page and rack up invoice costs. Most practitioners find this method outdated and frustrating. Selecting a software with a flat-rate and unlimited pages will eliminate the risk of your client getting nickeled and dimed down the road. Use this savings calculator to evaluate the money saved when using a flat-rate software.
After opening your data room, you will want to see which potential buyers are most active in the room and get insights into which documents they are most engaged with. Pick a software that provides you with VDR insights so you can stay on top of buyer behavior.
Although most VDR software platforms are relatively user-friendly, it’s integral to pick a provider that provides ongoing support for you and your clients. Some vendors do not offer 24/7 ongoing support. If questions come up, you will want to have a VDR that can answer your questions at any time.
Whether you have already selected your partner or are still in the hunt, actively engage with potential vendors to determine that they will help you close your deals and also prepare you for success in the future. Many practitioners get distracted by the “Wine and Dine” method and sacrifice quality from their client. Make the right decision for you and your clients by picking a provider that has a high-quality product, is cost effective, and will help you close deals more efficiently.