What is a traditional data room?
A traditional data room is a secure space used to house, organize and exchange data among parties involved in a strategic business transaction. Traditional data rooms are physical locations where paper copies of documents are compiled, stored and managed.
What is a virtual data room?
A virtual dataroom is a secure online repository of documents used for hosting and the distribution of information. Typically, a dataroom is used to facilitate the due diligence process during an M&A transaction or other capital transactions. The dataroom allows administrators to make confidential documents available at will while being able to monitor reviewers’ due diligence actions.
What are the risks in using a consumer grade file sharing system vs a purpose built virtual data room?
Consumer grade file sharing systems such as Box, Dropbox™, and Google Drive™ market themselves as low-cost solutions for the high-stakes challenges of M & A due diligence. However, recent security incidents have shown that they are not a viable solution for the requirements of a secure, purpose built application that targets the challenges of complex M & A due diligence.
Why use a data room such as DatasiteOne designed exclusively for the M & A industry?
The process of participating in a successful M & A transaction is a complex process for both buyers and sellers. The abundance of minute details involved in this multifaceted practice requires the intricate coordination of vast groups of personnel, the sharing of sensitive business information, revealing time-sensitive milestones, and the discovery of hidden costs while maintaining accurate communications to all participating parties. With the importance and size of today’s M & A transactions, enterprises must rely on leading solution providers that can eliminate both the security and legal risks associated with these procedures while facilitating the distribution of critical information during this essential business process.
What should I look out for when choosing a data room for M & A?
While options exist in the market, they are certainly not equal. When evaluating providers, it is best to grade on six criteria: