A data room is a type of virtual storage solution that provides the security of a place to store documents. It also comes with a number of additional features to assist with the due diligence process. These features include annotations tools and granular access rights, watermarking, and activity tracking.

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

Traditionally, businesses have used email to share SOC 2 docs and other documentation. This is not just inefficient, it also causes problems with version control. It’s also a security risk with cyber-attacks increasing, leading to compromised inboxes, stolen credentials and attacks on phishing.

Many secure storage and file sharing solutions like Box and Dropbox provide access to documents on any device or vpnsecure speed in any location. They provide a high degree of security, but most people and businesses need more. Documents that are sensitive and used for fundraising or due diligence contracts should be stored in software that has more protection.

The most important question to ask any’secure data room’ is, does it restrict authorized users from sharing documents with non-authorized users? Unfortunately the answer is usually « no ». Most’secure data rooms’ do not restrict the number of times the same user credentials can be used to access the system. It is easy for people to re-use logins they have created on their personal devices or copy and paste the URL into the browser on a friend’s computer.