Data rooms are primarily used to store information, track and share crucial documents in the business. They are frequently used in M&A transactions or fundraising as well as other due diligence processes. Unlike email or free file sharing services, they can be secured with password protection and two-factor authentication, watermarks, and other security features. This is especially useful for companies dealing with sensitive information, like medical devices or biotechnology.
A data room can be accessed by authorized users from any device with an internet connection, which includes mobile phones and tablets. Users can access, print and download documents in the data room. They can also save them to review later. Users can also request help, receive notifications and get notified when the document is uploaded, or if there’s new comments added to an existing document. The data room is searchable which makes it easy to locate information even if the information is scattered or not organized.
Create an organized folder structure that is reflective of the nature of your business or transaction to maximize the benefits of your data room. Label the folders clearly and group the documents together to make it reasons to use data room for the due diligence process easier for buyers to view the whole picture. Consider implementing an audit log in order to track who has viewed or downloaded the document and at what time. This is a crucial feature to show compliance with regulatory requirements or securing intellectual property.