How to Select a Data Room Service
A data room service is a secure, virtual environment that permits sharing of data during due diligence, M&As, bankruptcy, financing and other business transactions. The data shared in these instances can be confidential or sensitive and it is therefore essential to protect the data. By using the data room, you’ll save time, money and effort compared to emailing or printing documents. Selecting the best data room requires some upfront analysis to determine which features are most advantageous for you and your specific situation.
There are a myriad of providers of data rooms, each offering a slightly different set of features. Some data room providers focus on security, while others focus on user experience and communication. Others offer a mixture of. Some of the most well-known options are Firmex, VDRSimple, iDeals, Intralinks, and Merrill Datasite.
Most data rooms provide granular access permissions to protect confidentiality and ensure that users are only reviewing relevant material. Some also offer multiple factor authentication and time and IP access restrictions to block unauthorized downloads or usage. Some offer internal team messaging that reduces the requirement for external communication tools such as email and help to reduce redundant communications.
Certain providers offer additional services to speed up due diligence, such as document transcription and scanning. These services are often extra cost, but they could be worth it for smaller companies or transactions that are complex.