A data room is a secure storage space non profit executive board that houses a company’s confidential documents. The most popular use for it is during due diligence on an M&A deal, when both parties must review the most important documents and contracts for business. However, it’s also used to provide information to investors for financing or restructuring projects or with third-party companies to assist in bankruptcy or e-discovery.
The most reliable data rooms are designed with due care in mind and come with features like granular access rights for access and reports on user activity. They allow the administrator of the data room to track the number of users who have viewed and downloaded specific documents. In turn, they can be confident that confidential documents are only accessed by intended parties.
There are a variety of file sharing tools that are free and easy to use, but they may not have the security or functions of the virtual data room. These tools might not have the structure of a folder or search capabilities that are needed to aid in implementing a reliable due diligence process.
It is crucial that the data room has a variety of storage capacities depending on the amount of documents will be saved and uploaded. The ability to upgrade or downgrade subscriptions without difficulty is essential to allow flexibility and peace of mind. It is also crucial that the data room supports collaboration among teams with features such as secure chat video conference calls, secure chat, and an extensive Q&A tool that can help manage the due diligence process.