A data room is a secure online more information document storage platform that can be used to communicate and exchange confidential information. It is utilized during the due diligence process of the deal, but it is increasing being utilized for other purposes like fundraising and business restructuring.

Data rooms were designed for the goal of streamlining and assisting the due diligence process. They enable companies to share sensitive documents with potential investors and business partners in a secure and simple environment. They can be used to facilitate a variety of business transactions including mergers and Acquisitions (M&A), joint ventures, capital raises, restructuring, listing on the stock market, and debt financing.

Users are invited by virtue of their role or contribution to a project, using an array of pre-defined or customized email addresses. The user can be given or restricted access to particular document groups, folders, or the entire content of the data room. This permits only those who have been authorized to access the information to do so. Users can look through the audit trail of their actions to see who has viewed what and when. This is essential to ensure legal compliance.

The robust security features include watermarking, role-based access, security scanning for viruses and encryption of data. The system can be set up to meet specific standards for compliance for the biotechnology, legal and medical fields, including ISO 27001, GDPR, GCP and HIPAA. This can improve the efficiency and lower operating costs.