A secure dataroom is a solution that’s cloud-based that is designed to store and share sensitive business information. It permits for restricted access. The modern equivalent of a physical room where hard copies of documents are viewed during negotiations for buying or selling, today’s virtual data rooms offer encryption technology and advanced security features, too.
Secure virtual datarooms are built following the same premise as personal file storage and sharing services like Dropbox or Google Drive but with a significantly higher level of security protection. Data and documents are protected as they are transferred to the cloud and shared in a virtual space and stored on the server. They’re therefore more secure than other file sharing and storage tools, which depend on passwords or plugins to limit access to certain devices and locations.
A data room is often equipped with collaboration features, in addition to basic access (on any device, wherever you are). chat and team messaging, which can help improve the efficiency of due diligence processes. They also tend to have a full audit trail that tracks all every user’s activity, to ensure that any breaches can be traced and traced back to the source.
The majority of data rooms are created to aid in the due diligence process in the merger or acquisition as both parties are able to access the information and perform a thorough review. They are also becoming more popular for other M&A activities like restructuring, fundraising, and divestitures. Some are even used to share and examine documents within teams, with an benefit of a more secure encryption security as compared to traditional email.