Data rooms are cloud-based services designed to ensure safe sharing and storage confidential documents. They typically offer granular access privileges, security, and version control annotations. They can be integrated with various productivity tools and give real-time insight into document activity.

Virtually any business can use a digital data room to share and collaborate on sensitive documents. There are several common use scenarios where these solutions could be especially beneficial for.

Startup founders looking for funding could, for example, use a virtual dataroom to communicate confidential revenue forecasts, IP ownership documents and detailed financial records. Investors can then conduct a thorough due diligence on the company and assess its potential for growth. It can also speed negotiations and boost confidence among investors.

In the same way, M&A transactions often require the exchange of large quantities of highly confidential documentation. M&A software enables attorneys and other interested individuals to access the necessary documents from one location without worrying about losing or misplacing important documents. Additionally, M&A software can streamline due diligence by enabling users to upload multiple files in bulk and aid in a more efficient analysis.

Finally, law firms and legal practices typically have to comply with strict regulations and protect the confidentiality of their clients’ information. A virtual data room solution can enable these companies to comply with ISO 27001, GDPR, GCP, and HIPAA standards by ensuring robust document security features such as watermarking and role-based access controls. It can also aid in improving customer communication by providing the ability to ask questions that are simple to use and provides useful features like video calling.