WHITE PAPER

VIRTUAL DATA ROOM

1

A NEW PARADIGM

MAY 2010

All rights reserved – DiliTrust 2010

  

Confidential data sharing in business life

Business life is punctuated by information exchanges between economic players.

These exchanges can be internal, between colleagues, or external, for example as part of
clients-suppliers relationships.

Common behaviour shows little importance to data confidentiality: what matters is trust
between individuals.

The different data sharing techniques:

Let us consider merger and acquisitions where legal, financial and social information of the
target company are analysed by the auditors of the companies interested by the acquisition.

 Paper-based or CD-based information exchanges

The information is sent directly to the teams in paper or electronic format. Confidentiality is
therefore not guaranteed: no reporting is available to precisely monitor which documents are
consulted and by whom...

2  Email-based information exchanges

The information is sent by email to one or several recipients.

This method is extremely risky: documents are delivered by multiple Internet servers and can
be downloaded and saved by the recipients.

With emailing, there is a strong possibility that the recipient will forward the documents.

 Physical Data Rooms

Documents are printed, organised and placed in a secured and constantly monitored room.
The experts of each team that come to review the documents have a sequential access to the
room.

This method takes time to implement, represents important costs mainly when it comes to
travel costs; the access of documents is complex, reporting is not available.

 Virtual Data Rooms

Once scanned, the documents are hosted on a secured server; the teams of auditors have
remotely access to these documents. Access is strictly regulated with the rights to view, print
or download the documents.

This method is cost-efficient (no travel costs). It is a secured method, which allows a strict
monitoring of the documents review. Furthermore, it is quick as it allows the different teams to
work in the data room simultaneously.

Tous droits réservés – DiliTrust 2010

 

Virtual data room, M&A & beyond

Merger and acquisition professionals have for a long time integrated secured exchanges in the
management of their audits transactions while organising information sharing between the
companies involved in the process.

There are several other events where the company has to share confidential information with
third parties and where the consequences of a confidentiality breaches can be extremely
harmful:

 Licences negotiations

 Acquisition or sale of a strategic asset

3
 Communication of documents to the legal department

 Strategic partnershipʼs negotiation

 Offer to tender concerning sensible industrial issues

The intensity of global economic competition imposes extreme caution to business leaders
when it comes to disclosure risks.

Fact

The particular advantage of virtual data

rooms concerning all types of B2B
transactions

All rights reserved – DiliTrust 2010

  

Promises that have not been kept by virtual data rooms

Virtual data room services first appear in the United States at the beginning of the millennium,
initially to allow information exchange on the syndicationʼs bank loans market.

They have been focused on the visible and immediate advantages of the electronic use:

 Documentsʼ stock organization

 Secured accesses

 Different access rights allowing to view, print or download documents

 Reporting: who read what, and when?

However, solutionsʼ providers forgot to take into account the users into this procedure and did
not know how to adapt the tool to their business practices. On the contrary, it appears that the
practices had to be adapted to the tool.

4 Hereʼs why

Mistake n°1: Organising Virtual Data Rooms like email services

Most of Virtual Data Rooms providers claim that the

documents are presented with a similar design to electronic Fact
mail services (similar to Microsoft Outlook). This is
apparently in order to comfort the user. The inability of the existing
solutions to satisfy the
Virtual data room documents are not emails. Data room users
principles follow in the physical world a precise logic, by
organising the information into files, then, into folders with a direct and thematic consultation of
the documents.

By trying to force the usersʼ behaviour in a logical information technology application, Virtual
Data Room providers have changed the way users work and lost them.

Tous droits réservés – DiliTrust 2010

 

Mistake n°2: Not having taken into account on screen reading constraints

When data room users are asked what is the major flaw of the electronic use, a majority points
out hardship of on-screen reading.

To such an extent where, contrary to the objective, the users usually print (mainly by using the
print screen function) the documents in order to work.

The documentsʼ consultation interfaces have accumulated several flaws:

 Poor quality of the document

 Slow loading of the pages

 Limited, or even missing option, of taking notes on documents

By not focusing on the essential, which is how users access documents and actually read and
interact with them, data room providers have lead to a negative feeling concerning on-screen
reading comfort and the use of electronic.

5
Mistake n°3: Having neglected the professionalsʼ interactions

During a business transaction process, there are several interactions between the participants,
starting with Q&As workflow between the parties.

The data room providers have taken into account the Q&A logic but have forgotten the human
aspect and the very logic of collaborative work. Professionals working in teams constantly
exchange information.

The proximity between team members within physical data rooms has been completely lost,
leaving the individual isolated behind his screen.

All rights reserved – DiliTrust 2010

  

Rethinking virtual data roomʼs services

The virtual data room concept has become a reality. In 2007, more than 30 % of the
companiesʼ transactions (higher than 25M€) in Europe have been carried out using VDRs.

In order to position VDRs as the method of choice for secured information sharing, it is
necessary to rethink, or define the genetic code of the service by registering different
principles:

Continuous improvement of the characteristics that have lead to the emergence of

VDRs and its absolute benefits compared to other solutions:

 Instant set-up

 Simultaneous use by multiple parties

 Efficient management of userʼs right and privileges

 Exchanges and data security and confidentiality

 Quick implementation
6
 Access flexibility (anytime and from anywhere)

 Usage tracking

 Global budget savings compared to physical data rooms

Superior user experience allowing instant use and real comfort

By definition, transactions that have requested documentsʼ secured exchanges involve

different team for each operation.

Users have to be able to find instantly their bearings when accessing the virtual data room.
They should not spend (or waste) time doing some training in order to know how to use the
data room, find how to send an alert to a colleague, how to comment or annotate a document.

The standard should be ʻzero trainingʼ; the first approach to the virtual data room should be
simple and intuitive.

Reading comfort should be placed above all.

How many professionals have discreetly admitted getting around the impossibility to print
documents by doing numerous screen shots to finally being back to a comfortable reading
paper.

Tous droits réservés – DiliTrust 2010

 

Therefore, a particular attention must be paid to the scanning quality of the documents;
reading documents should be possible in full screen with large possibilities to annotate
documents or highlight important passage of the document.

Multiple collaborative work possibilities

Positionnig the user at the centre of the service is also allowing him to get back to a similar
level of interactivity he used to have in physical data rooms.

Along the collaborative tools available within the members of a same team:

 Q&As workflow sharing

 Confidential Instant Messaging and secured chat rooms

 Alert on a specific document or content

□ Memo and annotations sharing

The VDR as a management tool

7
VDR are considered as short-lived and volatile tool. At the end of the transaction, the
collaborative workspace is closed and the data room is destroyed.

If this approach is not fundamentally to be questioned, (as the data room has to be closed if it
is the usersʼ wish), the data room can also be considered as a continuously updated
information center about the company, since its creation, and through its successive changes.
It allows On Demand valuation, as well as a follow-up of the corporate performances over
time.

All rights reserved – DiliTrust 2010

  

Why DiliTrust ?

 Our approach is new. It consists firstly in taking into account the needs and natural
behaviour of professional users and secondly in using the best of technology to offer a
customized, high –performing and intuitive solution.

 DiliTrust approach is different to its competitors who start from the technology to
develop offers towards professionals.

 Our objective is to replace the user at the front of the solution, the tool and make its
experience as easy, painless and useful as possible.

 Our solutionsʼ conception is based on the usersʼ natural behaviour. On this point, we
consider that electronic current standards in terms of design do not correspond to the
end userʼs natural behaviour.

 Beyond obvious points such as security and performance, our efforts are concentrated
on the conception of original solutions that will ensure responses to the natural needs
of the users, for instance, concerning on screen reading.
8
 The tool we are offering has to allow the professional user to complete its mission,
which is frequently important and complicated, under the best conditions of comfort
and extreme freedom in terms of navigation, search, reading, exchange, or analysis.

 The solution we are offering is created as a permanent information center about the
company, since its creation, and through its successive changes.

 Applied to other sectors and professions, DiliTrustʼs solution becomes a powerful tool
but still highly intuitive and available of instant and secured information exchanges
between professionals offering an incomparable level of interactive collaboration.

 In terms of business model, we are introducing a new pricing based on the number of
teams involved in the operation, independently of the number of shared documents. At
the same time, we have a pricing model based on the number of pages that constitute
the data room. The customer is free to choose the most cost efficient model for his
project.

Tous droits réservés – DiliTrust 2010

 

About DiliTrust

Dilitrust SAS reinvents the secure exchange process of confidential and critical information in
a B2B transaction context.

DiliTrust offers an innovative virtual data room service focused in priority on the professionalʼs
behaviour and expectations.

Created in 2009 by a team of experts in financial information and new technology, DiliTrust is
based in Paris.

To know more about DiliTrust, visit our website www.dilitrust.com

Contact

Nicolas Raynier - CEO – E : nraynier@dilitrust.com - T : + 33 1 43 87 90 62

All rights reserved – DiliTrust 2010