While apps such as Dropbox or Google Drive are fine for everyday file sharing however, when it comes down to sensitive information that may be shared in an M&A process or IPO, data rooms offer superior features. In contrast to the free file storage platforms that are designed for sharing files, these are set up to share files in a highly secure environment. They can also provide advanced permission settings, auditing capabilities and watermarking to ensure only authorized people can view and download the needed files.
A virtual dataroom allows both parties to conduct due diligence, and has a workflow that is managed for each document. This ensures that confidential information regarding business, such as patents or financial performance, can only be viewed by interested buyers. All conversations are stored within the platform. It also helps in preventing leaks and decreases the chance of sensitive information getting into the wrong hands.
Activity audit logs are another key feature of the data room. They provide a thorough review of who accessed a document and when. This enables the M&A team members to keep track of interest levels, and decide if they want to continue or move on with negotiations. Additionally, reports from the data room aid in keeping teams organized by providing a quick overview of the activities of the group (e.g. Who has logged in and who has edited or viewed which documents, and when?
A virtual data room also enables users to sift through a huge number of files by utilizing a powerful search engine. This includes full text search, Optical Character Recognition (OCR) filters based on labels and a range of logical operators, and much more. The ability to automatically number and index folders and documents makes it easy to find and organise large volumes of data.
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