What is a Data Room?

A data room is a digital storage solution that offers a secure place to store documents. It also comes with a host of features that assist with the due diligence. These include annotation tools that allow for granular access, watermarking, and activity tracking.

Data rooms are commonly used to share security documents with clients (SOC 2 documents or compliance certificates) to aid due diligence. Sharing this information with other parties before the deal is closed is a great strategy to speed up the due diligence process and decrease the risk.

Email is employed by companies to share SOC 2 documents as well as other documents. This isn’t only inefficient, but also creates problems with version control. This is also insecure, with the increasing number of attacks on email, which can result in compromised mailboxes, stolen credentials, and phishing attacks.

Many secure storage and file sharing options like Box and Dropbox provide access to documents on any device or any location. They provide a high degree of security, however most people and businesses need more. sensitive documents that are used for due diligence negotiation, fundraising or even negotiating deals must be stored and shared through software that provides greater levels datazoning.net/how-to-choose-data-room-software-for-ma-risk-management of security than these personal file-sharing platforms.

The most important thing to inquire about a “secure data room” is whether it restricts authorized users from sharing files with non-authorized individuals. Unfortunately, the answer is generally “no”. Most secure data rooms don’t even limit how many times the same user’s credentials can be used to access the system. Users are able to reuse logins on their personal devices or copy and paste an URL into the browser of a friend’s computer.

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