When it comes to high-stakes business transactions, making sure that all pertinent information is scrutinized is critical. This could involve sifting through thousands of highly-confidential documents. This is not just a time-consuming process for the people involved, but it also poses significant security risks for the company itself. There is a simpler way to manage document reviews of this kind. Data rooms are virtual or physical space where businesses can store and share sensitive information with authorized persons. Data rooms are usually used in mergers and acquisitions tenders, capital raising and other business transactions.
While free or low-cost applications such as Dropbox, Google Drive, and SharePoint are useful for file sharing on a regular basis however, they do not provide the level of security and accountability required for due diligence and protect important documents for business. This can lead to errors in handling important documents, and pose a risk of compliancy that may derail the entire transaction.
There are a variety of dedicated online data room companies that offer a safe, secure environment to share confidential information with third parties. These services are usually easier to use than physical data rooms, and offer a variety other features that can speed up the sharing process.
A data room, like it may have a drag and drop upload feature that allows users to upload large documents in just one click. Advanced search capabilities enable documents to be retrieved quickly, even if they’ve been uploaded in large numbers. Other key features might include customizable watermarking that displays digitally over files whenever they’re viewed, downloaded, or printed, and privacy settings that allow administrators to set customized NDAs for every user.
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