A data room is a safe method to share sensitive information, whether for M&A or fundraising, legal cases or preparing an IPO. Access permissions are granted to users in granular ways, which can be customized according to role, document or folder level as well as activities within the data room, help to ensure the integrity of data. The top providers offer many security features, including encryption, watermarks, and multi-layered server protection.

The most popular use for the use of a data room is due diligence. This is when two sides review business-critical documents in order to determine any possible risks or problems prior to making a deal. A virtual data room is ideal for this process, as it allows both parties to upload and access documents from a single location. A good data room will include an appropriate template that can be customized to meet the specific requirements of a specific project or due diligence. It will also have a robust task manager, that lets you see all the uploading and reading tasks and the people who have been assigned to these tasks.

In turn, it makes it easier to follow up on projects and keep them on schedule. Most data rooms also include a Questions and Answers feature that allows for discussion between parties. This helps speed up negotiations and eliminates the necessity of sending back and forth emails. One of the best features that top providers offer is a complete set of reports detailing all user activities, from what documents were viewed, to the time they that site were viewed and by who.