Data room services provide an encrypted, virtual environment to share information during due diligence, M&A, financing, bankruptcy and other business processes and transactions. In these situations, the information shared could be classified or secretive. It is therefore important to safeguard this information. By using a data room, you’ll save time, money, and effort compared to emailing or printing documents. Selecting the best data room is a matter of doing some preliminary analysis to determine which features will be the most suitable for your particular situation.

There are numerous providers of data room services, each offering distinct features. Some focus on security, while others on user experience and communication and some offer a mix of both. The most well-known choices are Firmex, VDRSimple, iDeals, Intralinks, and Merrill Datasite.

Most data rooms offer access rights that are granular to guarantee confidentiality and ensure that users only have access to relevant information. Some offer multi-factor authentication and time and IP access restrictions to stop illegal downloads or use. Some even provide internal group messaging, which decreases the need to use external tools for communication, such as email, and can reduce the number of redundant communications.

Some providers offer additional services that can speed up the due diligence process, for example document scanning and transcription, and eDiscovery. These are usually added costs, but they can be worthwhile for smaller businesses or transactions that are complex.