What is a Data Room?

A data room is a storage option for electronic files that allows documents to be stored in a safe environment. It also comes with a host of features that assist with due diligence. These features include annotations tools, granular access permissions, watermarking and activity tracking.

Data rooms are frequently used to provide security documents to clients (SOC 2 docs or compliance certificates) to help with due diligence. Sharing this information with other parties before the deal is completed is a great way to speed up the due diligence process and decrease the risk.

Email has been utilized by companies to share SOC 2 documents and other documents. Although this is a good idea, it’s inefficient and causes issues with version control. This is also unsecure, with the increasing number of attacks on email, which can result in compromised mailboxes, stolen credentials and phishing exploits.

Many secure storage and file sharing solutions such as Box and Dropbox allow access to documents on any device or any location. They provide a high level of security, however most companies and individuals require http://www.datazoning.net/6-important-points-for-virtual-data-room-reviews more. Documents that are sensitive and are used for fundraising or due diligence deals must be stored in software with higher levels of security.

The most important thing to inquire about any «secure data room» is whether it prohibits authorized users from sharing files with non-authorized users. Unfortunately, the answer is generally «no». The majority of «secure data rooms» do not even limit the number of times the same user credentials can be used to access the system. It is easy for users to re-use logins from their own devices or copy and paste the URL into the browser on a friend’s computer.