Document version control is a structured way of managing and tracking changes made to a document. Tools like Google Docs and Google Sheets display a version history with timestamps and owners of the version. There’s nothing wrong with these tools for basic version control, if teams use them for non-critical daily work.
But when it comes to mergers and acquisitions (M&A), the stakes become much higher. This guide explores the alternative of using data rooms for M&A file versioning and secure document management.
Key Takeaways
- Traditional document tools fail in M&A due to inconvenient version tracking, lack of notifications, and security issues.
- Virtual data rooms (VDRs) centralize version history, provide clear labeling, and offer enhanced visibility of user actions.
- VDRs enhance security with AES encryption, granular permissions, and immutable audit trails, making them ideal for sensitive transactions.
- VDRs also allow for efficient storage of multiple versions without additional costs, helping deal teams manage documents effectively.
- Overall, VDRs outperform traditional tools by ensuring clear versioning and robust security during high-stakes M&A processes.
Table of contents
Why Traditional Tools Fail Under M&A Pressure
Traditional document-sharing tools have several issues that make them unsuitable for the demands of high-stakes transactions:
- Version history is not immediately indicative. You need to go to File > Version history > See version history every time you want to see which version it is. This is inconvenient and leads to people not checking versions. This also may result in crucial details being missed.
- You can’t enable notifications for added/removed versions. Yes, you can enable email notifications, but in M&A, it’s crucial to track when files are added, removed, or downloaded.
- Traditional tools are disconnected. It’s not uncommon for collaborators to upload local files to Google Docs, download them locally again, and upload them to Slack/Asana/ iManage. Often, incorrect versions get attached across these tools, leading to errors and hours of wasted labor.
Besides being inconvenient for structured version control, traditional document-sharing tools lack security features strong enough to reliably prevent compromise of corporate accounts and data breaches.
This can lead to class-action lawsuits from investors who suffered financial harm due to disclosed security incidents. In 2025 alone, investor losses following such disclosures reached $403 billion.
How VDRs Solve Version Control In M&A
Virtual data rooms (VDRs) are M&A platforms specifically designed to support audit-grade document versioning and secure file management throughout the deal lifecycle. Here’s how VDRs solve document version control:
- Centralized version history. All document versions are tied to a single file. Rather than sharing new versions across tools, users can upload a new version via the edit menu of the file inside the data room.
- Version clarity. A new version is automatically assigned to a visual label: v1, v2, v3, v4, and so on. Each version is timestamped and displays the owner. As a result, there’s no guessing which version you’re currently working with.
- Immediate visibility to user actions. All version-related actions (for example, adding, restoring, making current, or deleting versions) are automatically recorded in an audit log. Admins can easily track who’s made changes and when.
- Storage efficiency. Some data room providers count only the current version of a document toward storage. Deal teams can conveniently store many versions of the file without additional expenses, which is especially useful in document-heavy deals.
- Version-related alerts. In VDRs, you receive a notification when a new version of a document is uploaded. A simple feature at first glance is much more convenient than receiving email alerts on each minor edit and comment in Google Docs/Sheets.
The results of working in an M&A data room:
- Everyone works on up-to-date documents with clearly labeled versions
- There’s no need to guess versions and chase edits across tools and shared files
- Versions are clearly traceable with all actions recorded for internal audits, external due diligence, or compliance reviews
Version Control Security in Virtual Data Rooms
Data rooms have security features that directly protect organizations working on M&A transitions from phishing attacks, malicious insiders, DDoS attacks, and account takeovers. Here is what makes version control secure and transparent in VDRs:
- AES 256-bit data encryption at rest and 2048-bit encryption in transit. Those are the same protocols used by governments and the military.
- Granular access permissions. This gives organizations full control of what documents users can see and interact with.
- Digital rights management (DRM). This preserves file-level permissions even after the file has been downloaded locally by the user.
- Immutable audit trails. Version records can’t be altered, even by VDR providers. This works as a huge deterrent against malicious actions.
- Multi-factor authentication (MFA) and IP/domain allowlist. This makes stolen credentials useless for attackers. IP restrictions make it impossible for attackers to access a VDR anyway because their network data will always be different from the allowlist.
Best VDRs for Version Control in M&A
Here are the three best virtual data rooms for deal document tracking and secure collaboration:
| Virtual data room | Version control capabilities | Security capabilities |
| Ideals | 20+ file formats supported for versioningUp to 50 document versions tracked within a single fileClear version labelsActivity log for version trackingVersion control email alerts | 8 levels of access permissions with DRMMFA plus IP/domain restrictionsISO 27001, 27017, 27701; GDPR, HIPAA, PCI DSS, SOC 1/2/3 certification |
| Intralinks | Version history (who changed documents and when)Version numbers, update time, size, and ownersVersioning activity logsComments under document versionsVersion control email alerts | 3 levels of access permissions with DRMMFA plus IP/regional restrictionsISO 27001, 27701; SOC 1/2/3; GDPR, HIPAA, PCI DSS, and others |
| Ansarada | Document historyVersions, timestamps, size, and ownersDocument history reports | 4 levels of access permissions with DRMMFA and IP address restrictionsISO 27001 and GDPR compliance, SOC 2 certification (data centers) |
Bottom Line
From both document versioning and document security perspectives, virtual data rooms bring more value to M&A practitioners than traditional file-sharing solutions. VDRs offer the necessary features to make document version control clear and visible. Version labels, audit logs, robust security, and the ability to work on versions in a centralized workspace are exactly what’s required for high-stakes transactions.
