What Is an Online Data Room For M&A?

Online data rooms house a repository of documents that are accessible through the Internet. Secure access is secured by user identification and password. It can result in cost savings over traditional physical data rooms. It also provides various other benefits including easy search capabilities, collaboration capabilities and the security of sensitive data.

The selling company has to upload relevant documents to an online dataroom, so that they are viewed and accessed by the buying side. This is essential because due diligence is a crucial step in the M&A process and failure to have a complete set of documents could slow down or end an acquisition.

M&A VDR providers have a diverse array of features, from simple drag-and-drop uploading of files to optical character recognition that automatically indexes files and creates an organized data room with index numbers. Some offer document permissions that are granular, which give users the ability to specify access restrictions for individual folders and files. Other options include multi-factor authentication that allows users to authenticate their identity in just one or two steps, like entering a one-use SMS code.

A reputable provider of an online data room will have support personnel who are available to answer any questions throughout the day. Some providers offer a support phone or chat service, while others have various support channels like email and live video conferencing. They also offer comprehensive assistance guides, as well as an area where customers can ask questions to experts.