The main reason for using a data room is to store the essential documents for business. They are commonly used during M&A transactions, fundraising and other due diligence processes. Unlike email or free file sharing services, they can be secured by using password protection such as two-factor authentication and watermarks and other privacy options. The capability to monitor and restrict access to sensitive data is particularly useful for businesses dealing with sensitive information, such as biotechnology or medical devices.
Users who are authorized can access a data room from any location that has internet connectivity, even mobile phones and tablets. Users can browse, download and print documents in the data room, or save documents for later review. They can also ask questions and receive notifications when new documents are uploaded or when there are new comments added to existing documents. In addition, the data space can be searched, making it easy to locate the data you need even in the event that it’s stored in many locations or is organized poorly.
Create a folder structure that reflects the nature of your transaction or business to maximize the benefit of your data room. Label the folders clearly and group documents together to make it easier for buyers to see the entire picture. Finally, consider implementing a detailed audit log to keep track of who has viewed or downloaded the document and at what time. This feature is important for demonstrating compliance to regulations or for protecting intellectual properties.