Data room is usually made use by companies that deal with legal, private equity, accounting, and investment banking. It is generally applied to those that perform mergers and acquisitions, corporate restructuring, insolvency, fundraising and the like. Such a room enables to store data, allows document exchange, file sharing, financial as well as legal transactions and more. It comprises of a physical data room, virtual data room or deal room.
The physical room is the traditional way of storing high-security data and documents. It comprises of a physical space that is usually established in the vendor’s office or of that of the lawyer. The adviser as well as the bidder inspects the room and also reports on various needed documents. There is also the involvement of teams of high expertise in different fields for carrying out large due diligence processes. As such the overall cost of maintaining a physical data room doubles the expenditure.
Then there is a Virtual Data Room (VDR) such as Firmex, Intralinks, Ansarada, etc. Such rooms are comparatively low expenditure when compared to the traditional data room. It performs similar functions of storing data as well as allowing exchange and sharing of files and documents and keeping them secured. As the name prescribes, it is a virtual room and not a physical room for data storage. It is a secure online room for document storage and distribution.
It is developed especially for companies that deal with important business and transactions in their dealing. It is highly used during the diligence process which involves preceding an acquisition to review, share as well as to disclose company documentation. It provides security as well as online dissemination of confidential data. It is of high importance that companies, as well as a business, choose the best of the best data room in the market for better confidentiality.