https://datasroom.org/details-about-digital-data-room/
A digital data room is a digital space for the secure sharing of crucial documents used in business. VDRs are used by companies who want to safeguard their proprietary information. However, life science and tech companies are the most frequent users. It simplifies complicated tasks such as M&A due-diligence and ensures that sensitive information isn’t divulged to the wrong people. It also facilitates collaboration for teams that work across the country and around the world.
Due diligence in M&A is usually a time-consuming and long-lasting process. Getting all the information together may require the sifting through many thousands of confidential documents. Without the right tools, it can be easy for the wrong people to see the information, posing a serious security risk to the business.
Virtual data rooms can be an effective tool to help make M&A due diligence more efficient and effective. These online storage platforms feature multiple layers of security and are highly secure. Physical security (continuous backups, uptimes of more than 99.9 percent) and security of apps (multi-factor authorization, password-protected agents applications) and security certificates (ISO 27001, SOC 1/2/3, GDPR) are all included.
Cloud-based tools that are free can be great for sharing files, however they don’t provide the same level security as data rooms. They may not have features such as the ability to audit, permission settings and watermarking, which are essential to an M&A deal.