A data room service provides a secure, virtual environment for sharing information during due diligence, M&A, financing, bankruptcy and other transactions and business processes. The information shared during these processes could be confidential or sensitive, so it is crucial to protect the data. Making use of a data room in order to share files can save time and money as opposed to physical or email documents. Finding the right data room will require some initial study to determine which features will be the most advantageous for you and your needs.
There are many providers of data rooms with each offering a different set of features. Some focus on security, some on user experience and communication and still others offer a mix of both. Some of the most sought-after options are Firmex, VDRSimple, iDeals, Intralinks, and Merrill Datasite.
Most data rooms have access permissions to users that can be granular. This helps ensure confidentiality and allow users to only have access to relevant information. Some also offer multiple factor authentication, as well as time and IP access restrictions to stop illegal downloads or use. Some even allow internal team messaging, which reduces the need to use other tools for communication such as email and helps reduce the number of redundant communications.
Some providers offer additional services to accelerate due diligence, such as scanning and transcription of documents. These services are usually an additional cost, but it could be worth the investment for smaller firms and complicated transactions.