What is an Online Data Room?


A virtual dataroom is a cloud-based service which allows multiple parties to look at documents and exchange information, and collaborate on projects, without the risk of compromising confidential information, or losing the control of the data. They are a great tool for M&A, strategic reviews and fundraising as well as internal document sharing.

The best online datarooms offer an extensive control over access to permissions, permission settings, custom analysis, secure storage and digital watermarking for downloaded files. They also provide a collaborative environment that is friendly for users. They also offer templates and ways to simplify uploading.

An important feature is redaction, which blacks out parts of a document to ensure personally-identifiable information stays private. Some VDRs have a fence-view feature that covers the document in a digital frame, preventing the use of screenshots. Other features include two-factor authentication, IP and time access restrictions, and a chat feature that facilitates real-time communication between users. They are hosted by numerous service providers, and offer various pricing policies including pay-per-page or pay-per-user, as well as an individualized experience for companies with unlimited users and high capacity.

An organized online data room will make an investor feel assured that there won’t happen any unanticipated surprises, which are important to a deal process. It also shows investors that you’ve considered the information you’d like to disclose and that you are serious about your business. This will boost the business’s value. Even if a company is unsure of the time it will take to close a deal, it is essential to use an online dataroom when making preparations for possible exits or investments.