A data room is a digital storage solution that gives you an secure storage space for documents. It also provides a number of additional features that assist in the due diligence process. These tools include annotations, granular access permissions, watermarking, and activity tracking.

Data rooms are commonly used to share security documents with clients (SOC 2 documents or compliance certificates) to support due diligence. Sharing this information with other parties before the deal closes is a great way to accelerate the due diligence process and decrease the risk.

Email has been used by companies to share SOC 2 documents as well as other documentation. While this is effective, it is inefficient and can lead to problems with controlling versions. It’s also a security risk as email-related attacks are increasing, leading to compromised inboxes, stolen credentials, and phishing exploits.

Many secure storage and file sharing services, such as Box and Dropbox, offer document accessibility on any device or in any location. They offer a high level of security, but most businesses and individuals need more. Documents datazoning.net/how-are-virtual-data-rooms-protected-from-sudden-blackouts that are sensitive and used for fundraising or due diligence deals need to be stored in software that has more protection.

The most important thing to ask about any “secure data room” is whether it blocks authorized users from sharing data with unauthorized people. Unfortunately, the answer is almost always “no”. Most’secure data rooms’ do not restrict the number of times the same user’s credentials can be used to access the system. Users are able to reuse logins on their personal devices or copy and paste a link into the browser of a computer friend’s.