Announcing our joint venture with European partner, Consilium Strategic Communications: Learn More

Westicke Partners IPO Advisory
Strategic Investor Relations
Independent Capital Markets Advice

Mobile Navigation

Westwicke Blog

The Westwicke Blog is designed to deliver information and insights into the ever-changing world of investor relations and the capital markets, with a specific focus on the healthcare industry.

What to Consider When Choosing a Data Room

Posted on July 5th, 2017. Posted by

What to Consider When Choosing a Data Room

At some point during your company’s growth, you will need to share sensitive data with investors and financial professionals by using a data room. In the old days, a data room was just that: a room filled with printed files and reams of paper containing patent descriptions, clinical data, and financial projections.

Today, data rooms are usually virtual. And with hackers increasing their efforts (and their ability) to steal sensitive data, it’s vital you consider security as well as service and convenience as you evaluate data room solutions.

There are several companies providing a range of services at different price levels from which to choose. We’ll look many of them here. Note that we are not endorsing a particular product or company, but merely providing an overview.

What Are Your Options?

Each company that we will mention provides access rights and auditing. Data room access rights determine who can get the file and how long the user can have access to it. Depending on what is needed, companies can then see who has accessed the files, when files were accessed, and even how many times the files were opened. Some data rooms even have timers that relay how long a file was open. Some services capture the downloader’s information within digital watermarks, so any sharing (such as printing of data) can be tracked to the person who accessed the file.

Merrill’s DataSite and Donnelly’s Venue are full-service “white glove” options. These data rooms not only allow for secure sharing of your information, but they also usually include teams of personnel in physical offices. This can include a project manager who guides you through complex SEC processes. As would be expected, pricing for these hands-on tailored services is relatively expensive. Pricing is project based (per page, for example) and negotiated in contracts. Small financial teams often turn to these high-touch providers to make sure filings are completed smoothly.

Middle range players such as Synchronoss’ Intralinks provide virtual-only data rooms designed specifically for the financial markets. Features are tailored to fundraising efforts and related SEC requirements, including various templates and task guides. This option is less expensive than the higher-end offerings.

Companies such as Box and Dropbox are file sync-and-share providers. While these offerings don’t provide specific financial workflow help, they are a very reliable way to provide and control data-sharing. They provide the same level of security. In fact, security for these services is arguably higher since the companies have only one function — keeping documents safe — whereas the larger companies provide a range of services.

These providers are essentially like a shared drive and are designed to have similar ease of use. Box and Dropbox are focused on providing a very user-friendly interface allowing users to access secure files easily and on multiple devices. Pricing models for these purely cloud-based services are less expensive.

Note that Box and Dropbox have business packages that provide additional features to their basic offerings, such as security access and audit logs, so you can see who has opened the files. The business editions also can offer prior versions which can be very valuable if your files were ever to get hijacked by ransomware.

When Security Is Paramount

If data is extremely sensitive and you are very concerned about security, some companies offer digital rights management. An example is Blackberry Workspaces (which, despite the name, does not require users to have Blackberry devices). With this offering, you can place controls into the file itself. This means that people who have access to the document cannot print, edit, or forward it, allowing you tight control over sharing of your information. This generally is very cumbersome for the user, who often has to install software and might be unable to view on a mobile device. Digital rights management has not seen wide adoption yet because it’s not easy to use.

Framing your news in the best light and sharing it at the right times are at the heart of any good investor relations program. But as hackers continue their assault on corporate information systems around the globe, it’s more important than ever to consider the mechanics of how information-sharing gets done.

Although you shouldn’t usually have to sacrifice convenience for investors, security should always be foremost in your mind. Fortunately, the services we’ve listed here have a good track record of keeping data safe. For more advice on best practices for sharing information, reach out.

Westwicke Enters Partnership with Consilium Strategic Communications

Announcing our exciting new partnership that extends the Westwicke Partners footprint internationally.

LEARN MORE

Our Locations