A data room is a digital space that is used to store information of a protected nature. It is utilized during the due diligence phase of a potential deal between companies. However, it could also be used to facilitate internal business ventures, such as restructuring, funding and primary public offerings.
It is important to think about the technical and customer support of a dataroom provider before deciding on one. A dedicated team in place to resolve any issues that arise is essential and should be available all day, 365 days a year. Additionally, look for a company that offers a comprehensive suite of reports on user activity in the dataroom – from where documents are looked at and downloaded, to the number of times they are printed. This helps with compliance as well as representational risk in the event of a dispute as it makes it easy to prove the documents that have been accessed altered, transferred or accessed.
Traditionally, datarooms were utilized to manage the difficult due diligence process in M&A negotiations, but they are now being used for all kinds of business ventures like restructuring and raising funds. Whatever the reason for an agreement due diligence is always reviewing documentation that is essential to the business and requires a dataroom that is secure and has strong features. A good dataroom will include watermarking and activity logs, as well as user permissions that can be altered according to a folder, document or an individual basis. Also, look out for tools to add annotations that allow users to make notes on documents that are only visible by them.