A data room is a secure online repository that allows teams to share documents and files in a way that is more efficient than email. It is usually utilized for due diligence during an M&A. However it is also useful for companies looking to attract investors or do other work that requires an extremely high level of confidentiality.
When it comes to M&As, tendering fundraising and restructuring projects, the most sensitive information is shared between several parties. It is often difficult to determine who has accessed which information, which versions are used and when changes were made. With a data room all the necessary information can be stored in one place with access controlled by an administrator. It’s a great method to avoid sharing that is not authorized and ensure compliance.
Virtual data rooms typically include several other features in addition to storage. These include bulk upload and drag-anddrop capabilities as well as automatic index numbering, optical character recognition dynamic watermarking, as well as an advanced search tool that will help you locate specific documents in a matter of seconds.
In addition to these features and other features, a majority of data rooms offer tools for redaction that permit users to selectively remove specific parts of a document, without breaking the file as a whole. This can be particularly helpful to avoid missing a single or multiple instances of sensitive information within documents, which could have a significant impact on the outcome of the transaction or project.