What is a Secure Data Room?


A secure dataroom is an online collaboration platform that simplifies due diligence, cuts down on timeframes for M&A and deal making while offering complete security. It lets both selling and buy-side teams to manage a transaction’s duration from beginning to end in a safe manner.

What sets a secure data room against file sharing websites like Dropbox is that it’s usually more geared towards the enterprise with the possibility of grouping users, set granular permissions and gain insight into usage via analytics (e.g. the time, date and location data is accessed. Many also have more sophisticated features such as the ability to prevent downloading and copying (a huge no-no) or even showing documents on a screen that cannot be scanned. Many of them have the industry’s top encryption technology to scramble sensitive information and multi-factor authentication to ensure it’s the user attempting to log in that is seeking access to the data.

Most secure data rooms also allow document download for offline viewing in PDF format. However, if you let users print these files on physical printers or allow them to save them to file drivers for different purposes, they are not protected by the same protection that is provided to the original data in the virtual data room.

If you could extract these downloaded files from the data room or other systems and then open them on a computer, without connecting to the Internet that defeats the entire purpose of using a secure data room for M&A due diligence, litigation, compliance and other documents that are sensitive and need to be locked to devices and not transferring to servers. That is why we recommend using a DRM solution that encrypts files to devices and not to servers, making it impossible to remove them from devices or share them.