A data room is a safe platform for online document storage that can be used for sharing and exchanging confidential documents. It is typically used during the due diligence phase of the deal, but it is increasing being utilized to support other functions, such as fundraising and business restructuring.
Data rooms were designed for the purpose of streamlining and aiding the due diligence process. They allow companies to share sensitive documentation with potential investors and partners in a secure, intuitive and user-friendly environment. They can be used for various business transactions, including mergers and acquisitions (M&A) and capital raising, joint-ventures, restructuring, stock market listings and debt financing.
Users can be invited via either a custom or a pre-defined list of email addresses, based on their role or contribution to the project. The user can be granted or restricted access to specific document groups, folders, or the entire contents of the data room. This makes sure that only those who require to access the data can do so and helps to ensure that there is no unauthorised sharing. Users can look through the audit trail of their actions to see who has viewed what information and when. This is vital for legal purposes.
Robust security features include watermarking roles-based access, virus scanning and data encryption. The system can be set up to meet specific compliance standards for the legal, biotechnology and medical industries, such as ISO 27001, GDPR, GCP and HIPAA. This can increase the effectiveness and reduce the operating costs.
