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A secure dataroom is a solution that’s cloud-based that’s designed to store and share sensitive business information. It permits controlled access. Virtual data rooms are the contemporary equivalent to physical rooms where hard copies were viewed during negotiations for buying and selling. They also offer advanced security features such as encryption technology, encryption, and other advanced features.

Secure virtual datarooms are built on the same basis as personal file storage and sharing solutions like Dropbox or Google Drive but with a significantly higher level of security protection. Documents and data are encrypted while they are being moved to the cloud, shared in a virtual room and stored on the server. This makes them much more secure than standard storage and file sharing tools that depend on passwords or plug-ins to lock use to devices and locations.

In addition, to basic accessibility (on any device and wherever you are), a data room will typically include collaboration capabilities, e.g. chat and group messaging, to increase the efficiency of due diligence processes. They also tend to provide a full audit trail of the activities of all users, so that violations can be tracked and traced back to their source.

The majority of data rooms are created to aid in the due diligence process of the merger or acquisition as both parties are able to access the data and conduct a thorough review. They are also becoming more popular for other M&A activities like restructuring, fundraising, and divestitures. They are also used to review and share documents in teams, with the additional benefit of offering greater encryption security protection than conventional email.