Data rooms are a better option for sharing sensitive business data with third-party companies than the free file-sharing services such as Dropbox or Google Drive. They provide users with a user-friendly interface, customized branding as well as support for integration with existing IT systems and workflows. They also come equipped with important security features such as the ability to grant granular permissions, audit trails, fencing view, and watermarking which are vital to ensure compliance with regulations in the industry and privacy laws.
It is important to have features that let users navigate large volumes of documents quickly and find the files they require. They include an organized folder structure, a clear names convention, indexing and version control that allow users to locate files by using keywords or metadata. They can reduce time and effort by automating index numbering. This creates a clear map for users to follow while reviewing files.
A data room can help simplify the review process not just for investors, but also other interested parties. Multiple users can browse, read and make comments on documents in real-time by using parallel document viewing and annotation features. This speeds up the turnaround of documents and increases productivity.
A virtual data room can also improve communication with stakeholders. It allows the creation of a Q&A that is organized by topic, which documents questions and responses and tracks any outstanding issues. This lets both the seller and buyers to resolve any miscommunications effectively and avoids information being lost in the process.