What is a Data Room?

A data room is a storage option for electronic files that allows documents to be stored in a secure environment. It also comes with a number of additional features to assist in the due diligence process. These features include annotation datazoning.net/mobile-security-quot-avast-scan-failed-quot-issue tools that allow for granular permissions, activity tracking and watermarking.

Data rooms are typically used to provide security documents to clients (SOC 2 docs or compliance certifications) to aid due diligence. This is a great method to speed up the process and decrease risk by sharing the information with third parties before the transaction is completed.

Traditionally, companies have used email to share SOC 2 docs and other documentation. While this is effective, it is inefficient and creates problems with controlling versions. It’s also unsecure, as email-related attacks are increasing, leading to compromised inboxes, stolen credentials and hacking exploits.

Many secure storage and file sharing options like Box and Dropbox provide access to documents from any device and in any location. While they provide a high level of security, many people or businesses require more than this. Documents that are sensitive and used for fundraising due diligence, negotiating agreements must be stored in software with higher levels of protection.

The most important question to inquire about a “secure data room” is whether it restricts authorized users from sharing files with non-authorized persons. Unfortunately, the answer is usually “no”. Most’secure data rooms’ do not restrict the number of times the same user credentials may be used to log into the system. It is simple for users to reuse logins from their own devices, or copy and paste the link into the browser on a friend’s computer.