A data room is a virtual area that stores information of a protected nature. It is generally used in due diligence during a potential transaction between two or more businesses but it can also be used for managing internal business ventures, such as funding, business restructuring and primary public offerings.
When selecting a dataroom service, it is important to look at their technical and customer support expertise. It is vital to have a dedicated staff available to handle any issues that may arise. This team should be available 24 hours a day, 365 days per year. Look for a dataroom provider that provides a range of reports that detail the user’s activities, ranging from when documents were downloaded and viewed and the number of times the documents were printed. This is essential for compliance and representational risk in the case of a dispute because it lets you easily prove that documents were altered, accessed, or transferred.
Datarooms can be used for many different business ventures, like the raising of funds and restructuring. Whatever the nature of an agreement due diligence will always involve reviewing documentation that is essential to the business and requires a dataroom with robust security features. A good dataroom will include watermarking and activity logs, as well as permissions for users which can be modified on a folder, document or individual basis. Also, look out for tools like annotation that let users create notes on documents that are only visible by themselves.