A data room is a web-based location that allows you to safely share confidential files and documents with other parties. Typically used during mergers and acquisitions, due diligence, and fundraising, the platform allows an efficient exchange of information and protects sensitive documents from redirected here ending up in the in the wrong hands.

The best data rooms feature an organized folder structure and an index that lets users find information by the topic or file name. Some data rooms also offer version control to ensure that everyone has the latest version and can track changes. PandaDoc is a well-known provider of data storage that provides all of these features in addition to customized analytics and tracking, watermarking for downloaded documents, and a cyber-secure environment.

The first step to creating a dataroom is to decide which documents will be included. The most commonly used areas are legal (Articles of Association and IP registrations) and finance (profit and loss statements, balance sheets) and documents pertaining to the company’s formation. This includes an updated cap table that clearly shows the percentage of ownership for the business. It is important to keep away from sharing unnecessary information, like non-standard analyses that are not relevant to the business’ future or current health. It is also important to keep a record of the users who have access to the data room to make sure that users who no longer require access are removed and permissions are updated for those who need access. This will ensure that only the latest and relevant information is available to view.