What Is a Data Room?

A data room is a place where multiple parties can access and share sensitive information in a secure environment. It is commonly used in M&A due diligence (a procedure that allows businesses to evaluate acquiring another business and its potential risks), fundraising, legal proceedings, and other business transactions.

You can upload documents to the VDR and share them securely to users who have been given permission by the administrator. This lets you centralize your documents, making them easier to review. Users can also make use of features such as metadata, search and in-document navigation to effectively discover and view the documents they need. Users can also track their activities to observe how often they interact with documents in the dataroom, and who is able to view which data.

An investor data room is an effective tool that can be leveraged during the funding process. It enables you to provide confidential financial information including revenue projections, IP ownership documentation, and detailed financial records, for investors to review thoroughly. This helps speed up the process of obtaining funding and increases confidence of investors in your company.

While many businesses use email to share and store documents, this can be messy and inefficient. 46% of employees say that it’s usually or at times difficult to locate the information they need within the company’s email threads and 83% of those have had to recreate a document due to the fact that they couldn’t locate an original version. A data room provides an alternative to this chaotic document sharing and storage.