Data rooms have become the standard in the M&A industry, as well as other business activities such as capital raising rounds or initial public offering (IPO). They are highly effective document sharing tools that allow secure and organized data exchanges between different parties. When compared to cloud storage applications and other file-sharing options, they are more user-friendly and have superior features in terms of privacy, security and collaboration.
In addition to the standard industry-leading encryption data room providers provide complete logging and report feature that ensures that all actions on the platform are tracked. This includes access times, who has viewed which documents and the amount of times they were looked at. The data is also stored across multiple locations and available to be retrieved even after the deletion of files. Other key security features of virtual data rooms are dynamic watermarks on printed and downloaded files, role-based permission settings two-way syncing indexing, inactivity timeouts and virus scanning.
Additional features that aid in efficient collaboration in a room for data include a logical folder structure, search functionality, various languages, and a comments section where users can submit their questions to other members. This allows for efficient communication and speeds up the process of making decisions. Additionally, data rooms allow for granular user restrictions/permissions and allow for the monitoring of all login activity by checking IP, device and location to prevent unauthorized data access. Moreover, they are an ideal tool to protect intellectual property, as they can prevent the leakage of sensitive information through the transaction process through features such as watermarking, download restriction and screenshot prevention.