A data room is an online, secure platform to share and store sensitive information with authorized users. They can be either physical or virtual and are typically used to complete legal or financial due diligence on a transaction, but can also be useful in business planning, fundraising or even meeting regulations.

Data rooms are typically employed in M&A transactions, where both parties have access to a virtual repository containing privileged information they must not disclose. However, a lot of businesses of all kinds and sizes rely on them to ensure safe collaboration and sharing of files too – especially start-ups and SMEs who may not have the money or time to invest in a traditional office set-up.

When selecting a data room provider, look for one that has a complete range of reports regarding the user’s activities, from who’s accessed which documents to whether they’ve printed or downloaded them. This is crucial to ensure that sensitive data doesn’t end up in the wrong hands. This can be a major problem for companies looking to sell or raise money.

Think about a dataroom that includes an integrated Question and Answer (Q&A) which can help keep discussions on due diligence on track and decrease the chance that sensitive information is shared with outside the dataroom. Also, it’s important to choose a solution that has ample storage space for documents and files you’re planning to upload – plus, simple task management tools that allow you to assign reading or document upload tasks to your team and advisers.

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