A data room is an online platform that allows users to safely share and keep confidential data. They can be virtual or physical and are utilized to carry out due diligence in transactions.
Data rooms are typically used in M&A transactions where both parties have access to a digital repository containing confidential information that they are not required to divulge. But, a wide range of companies and sizes rely on them to ensure safe collaboration on projects and file sharing as well – particularly start-ups and SMEs who may not have the money or time to invest in a traditional office setup.
When choosing a provider of a data room, select one that has a complete suite of reports about user activities. This includes who has accessed what documents, and whether they’ve printed or downloaded them. This is crucial to ensure that private data doesn’t end up in the improper hands, which could be a serious issue for businesses considering selling or fundraising.
You should consider a dataroom with an integrated Question and Answer (Q&A), which can help keep due diligence discussions on track and reduce the risk that sensitive data is shared outside the dataroom. Lastly, it’s good to choose a data room solution that has ample storage capacity for the documents and files you expect to upload. Additionally, you should consider simple task management tools that can help you assign tasks for reading or uploading documents to your advisers and team members.