Data rooms have become the standard in the M&A industry, as well as other business activities like a capital raising round or initial public offering (IPO). They are highly efficient document sharing tools that facilitate secure and well-organized data exchanges between parties. They are more user-friendly than cloud storage apps or other file sharing tools, and offer superior security features privacy, collaboration and security.
In addition to standard industry-leading encryption, data room providers offer complete logging and report function that makes sure that all actions taken within the platform are recorded. This includes access times, who viewed which documents and the amount of times they were looked at. The data is stored in multiple locations, and is accessible even after deletion of files. Other security features of a virtual data room include dynamic watermarks that appear on downloaded and printed files, permissions that are based on roles, two-way syncing, automatic indexing, timeouts for inactivity and virus scanning.
The latest features that facilitate efficient collaboration in a data room include a logical folder structure including search functions, multiple languages and a comment section that allows users to post their queries to other members. This allows the entire team to communicate effectively and speed up the process of decision-making. Additionally, data rooms allow for granular user restrictions/permissions and allow for the monitoring of all login activity by checking IP, device and location to prevent unauthorized data access. Furthermore, they’re an ideal tool to safeguard intellectual property, as they prevent the leakage of sensitive information throughout the process of buying and selling by providing features such as watermarking, download limitations and screenshot prevention.