While tools such as Dropbox or Google Drive are fine for everyday sharing of files however, when it comes down to sensitive information that may be shared during an M&A process or IPO, data rooms offer superior features. Unlike free file storage platforms, these are specifically set up to share files in a secure environment. They also offer advanced access control, auditing capabilities and watermarking, which ensures that only authorized people can view and download the required files.
A virtual dataroom allows both parties to carry out due diligence, with an organized workflow for each document. This assures that confidential information, such as financial performance, patents or product development is only viewed by interested buyers and ensures that any conversations remain within the platform. This prevents leaks, and reduces the risk of sensitive information falling into the in the wrong hands.
Other key data room features include activity audit logs, which give a detailed look at who has visited a specific document and when. This enables the M&A team members to keep track of the interest levels and decide whether to continue or continue with negotiations. Data room reports can also aid in keeping teams organized by providing a complete overview of the group’s activities. who has been logged into the data room, who has looked at and/or edited which files and when).
A virtual data room also enables users to sift through thousands of files in a matter of minutes by utilizing a powerful search engine. This includes full-text searching, Optical Character Recognition (OCR), filtering by labels, a variety of logic operators, and much more. The ability to automatically number and index folders and documents also makes it easy to locate and organize large quantities of data.