A data room is an online platform that allows users to safely share and keep confidential information. They can be both virtual and physical and used to ensure due diligence on a transaction.
The most obvious usage of the data room is during M&A in which both parties of a deal can access an online repository of confidential information that they are legally bound not to disclose. However, many business types and sizes depend on them for safe file sharing and project collaboration too – especially start-ups and SME’s who might not have the funds or time to invest in a traditional office set-up.
When selecting a data room service, you should choose one that provides a full range of reports regarding user activities, ranging from who has accessed what documents to whether they printed or downloaded them. This is essential to ensure that private information isn’t slipped into unintentional hands, which can be a major concern for businesses that are considering selling their business or fundraising.
It’s also worth looking into using a data room that comes with an integrated question and answer (Q&A) tool that could be helpful to keep due diligence discussions on track during a transaction as well as reducing the risk of sensitive information being divulged outside of the data room. Additionally, it’s a good idea to choose a data room solution with plenty of storage capacity for the documents and files you expect to upload. It also includes easy-to-use tools for managing tasks which can assist you in assigning tasks for reading or uploading documents to your team and advisers.