How to Select a Data Room Service

A data room service is a secure, virtual environment that allows for the sharing of data during due diligence, M&As, bankruptcy, financing and other business transactions. In these situations, information shared may be sensitive or private. It is therefore essential to protect this data. Using a data room to share files will save time, money and effort over email or physical documents. However, choosing the most effective data room service will require some work upfront to find out which features are most beneficial for your specific situation and needs.

There are a variety of providers of data room services, each offering various features. Some data room providers focus on security, while others are more focused on the user experience and communication. Others offer a combination. Some of the most well-known 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 view material that is relevant to them. Some data rooms offer multiple factor authentication, time and IP restriction on access and restrictions to prevent unauthorised downloading or use. Some also offer internal team messaging, which can cut down on the need for external communication tools such as email and can help to cut down on redundant communications.

A few providers have added value through additional services that can help speed up the due diligence process, like document scanning and transcription as well as eDiscovery. These are usually added cost, but they could be worth it for smaller companies or for complex transactions.

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