There are a variety of data rooms. Some are designed towards specific industries or projects and have specific applications. Others are more general in nature and offer more tools. You should pick a company who offers a balance between features and price. Look at the reviews of the provider on independent review sites and take note of the features they provide for their price.
Due diligence
Due diligence is the most well-known application of a virtual dataroom in mergers and acquistions. The buyer has to review large quantities of confidential documents. This can be a lengthy process however, using a virtual data room the documents can be reviewed remotely, without having to travel.
Virtual data rooms can be used for fundraising, business restructuring, and bankruptcy instances. These are usually complex and delicate processes that require the examination of important documents to ensure that a deal is financially beneficial for both parties.
It is crucial that a virtual space allows access to users with granular permissions that can be set at the document and folder levels. This is particularly important in due diligence scenarios, where access is usually restricted to the administrator and a handful of the buyers’ advisors (also called a “Clean Room”). A virtual data room should also have an editor for rich text that lets users make comments on any document stored in the platform. This allows the other party to be able see any issues and clarify certain details.