Types of Data Rooms

There are various types of data room. Some are designed to specific industries or projects and have specific usage cases. Others are more general and provide more tools. It is essential to choose an organization that provides an excellent balance of features and value. Examine how users have rated a provider’s software on review platforms that are independent and be aware of the features the company provides for their price.

Due diligence

The most common use-case for a virtual data room is due diligence in mergers and acquisition deals. The buyer must review large quantities of confidential documents. This can be a lengthy process however, with a virtual data room the documents can be reviewed remotely without needing to travel.

Other uses for a virtual data room could be divestitures as well as fundraising, business restructuring and bankruptcy cases. These are often complicated and sensitive procedures that require the review of important documents to ensure that the deal is financially beneficial for both parties.

It is essential that a virtual data room is able to grant granular access permissions that can be configured on the level of a types of data rooms folder and document. This is particularly important in due diligence situations, where access is usually restricted to just the administrator and a handful of the buyers’ advisors (also known as a “Clean Room”). A virtual data room must also include an editor that is rich-text, which allows users to post comments on any document stored within the platform. This helps to clarify points for the other party and lets them take note of any areas of uncertainty.