How to Select a Data Room Service

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A data room service is a secure, virtual environment that allows the sharing of information during due diligence, mergers and acquisitions, financing, bankruptcy and other business transactions. The data shared in these instances could be confidential or sensitive, so it is crucial to protect the data. By using a data room, you will save time, money, and time when compared with emailing or printing documents. Selecting the best data room requires some upfront analysis to determine which features will be the most advantageous for you and your needs.

There are a myriad of data room service providers with each offering a different set of features. Some focus on security, some on the user experience and communications, and still others offer a mix of both. Some of the most popular options are Firmex, VDRSimple, iDeals, Intralinks, and Merrill Datasite.

The majority of data rooms provide access rights that are granular to guarantee confidentiality and ensure that users only access relevant content. Some data rooms also offer multiple factor authentication, time and IP limitations and access limitations to prevent unauthorized downloading or use. Some even allow internal team messaging, which eliminates the need to use other tools for communication such as email and helps to reduce redundant communications.

Certain providers offer additional services to accelerate due diligence, such as scanning and transcription of documents. These are typically added cost, but they could be beneficial for smaller companies or for transactions that are more complex.