What Are Data Rooms?

A data room is an online secure repository that lets teams share documents and files in a way that is more efficient than email. Most commonly used during due diligence for an M&A and M&A transaction, it can be useful when a company is looking to find investors or to carry out other project-based work that requires a high level of confidentiality.

During M&A, tendering, fundraising and restructuring projects, there is usually a significant amount of confidential information shared among multiple parties. This can make it difficult to track who has accessed what, what versions are in use and when changes were made. All the information you require can be stored in the dataroom, and access granted by an administrator. It’s an excellent way to prevent unauthorized sharing and help maintain compliancy.

Alongside storage, there are a variety of other features that are usually included with most virtual data rooms. These include drag-and-drop and bulk upload capabilities and automatic index numbers, optical character recognition dynamic watermarking, and an advanced search tool that will help you find specific documents in seconds.

Most data rooms have redaction tools as well as these features. These tools permit users to selectively block parts of a file without breaking the entire document. This is especially useful to avoid accidentally missing important information within the document, which could have a significant impact on the outcome of a deal or project.