Data rooms are primarily used to store, track and share critical business documents. They are frequently employed in M&A transactions as well as fundraising, along with other due diligence processes. Contrary to email and free file sharing services they are protected with password protection such as two-factor authentication and watermarks and other privacy features. The ability to control and restrict access to sensitive information is particularly useful for companies working with sensitive information, such as medical devices or biotechnology products.

Users who are authorized can access a data room from any place that has internet access, even mobile phones and tablets. Users can browse, download and print documents from the data room, or save documents for later review. Users can also submit questions, receive notifications and be notified when documents are uploaded or if there’s new comments on an existing document. The data room can be searched and indexed, making it easy to locate information, even if information is scattered or poorly organized.

Create the structure of your folders that represents the nature of your business or transaction to maximize the benefit of your data room. Make sure that you clearly label the folders and documents and group them together so that it’s easy for potential buyers to see the full picture. Consider implementing a detailed audit log to track who has downloaded or viewed which document, and when. This is a crucial feature to show compliance with the regulatory requirements or protecting intellectual property.