A data room is a secure physical or virtual space which is used to archive confidential business documents such as mergers and acquisitions (M&A) as well as initial public offerings and fundraising rounds. Only authorized participants in the transaction can access the information stored in the data room. This can include financial records, legal agreements, intellectual property and contracts.

It is important to compare several providers before you decide to purchase a solution for due diligence. This will allow you to find the one that offers the best combination of features for a price that fits your budget. Look for a provider with many features that help reduce friction and facilitate the project in a quick manner, including multilingual search, OCR, file previews, smart AI categories, and private equity case studies reporting.

Once you’ve found a good match, you can open your data room and upload any important documents. From there, you can respond to requests from participants, set up access rights, and monitor engagement. As the project progresses you can add or delete files, organize folder structures and create new groups to organize the data in more convenient ways.

Virtual data rooms can save companies money when compared to physical rooms. Typically, companies hosting physical data rooms have to pay for a space to house the documents, and hire security to ensure that the documents are safe from damage, and provide buyers with hotel and travel costs when they want to review the documents. However, a virtual data room can be hosted online and accessible to users from around the world, eliminating costly travel costs and reducing the overall cost of the project.