Decorative pattern

A useful data room checklist

March 2024

The adaptability and flexibility of a virtual data room make it an essential business tool for companies of every type and size. From startups to multinationals, companies use a data room to securely collect, store, manage and share their sensitive information. In every industry, data rooms are used to raise funds at every fundraising stage from seeking seed-capital to preparing for an IPO. A data room also provides a secure space for the due diligence process during complex transactions such as entering into partnerships and mergers and acquisitions (M&As), and data rooms are increasingly being used in the day-to-day management of business-critical documents.

However, such is the usefulness of data rooms that other types of less-equipped cloud-based generic file-sharing services purport to do the same things, with potentially perilous consequences. Their functionality falls markedly short of providing the benefits and advantages of a data room.

Below, we provide a checklist of the capabilities, mechanisms, and features of a top-end data room. It is a useful guide to help prospective and current users to optimise their data room usage to achieve their business objectives.



A checklist of data room features and functionality

Security mechanisms
Ensuring the security of confidential information is a top priority for every company. It is vital to protect sensitive information from cybercrime, data breach, theft, and unauthorised access. A data room has the highest level of security protocols built into its mechanisms that generic file-sharing systems do not have. These include granular user-based permissions procedures that limit access only to authorised users; multi-factor authentication; data encryption in transit and at rest; content watermarking; prevention of copying, downloading, printing and forwarding of documents without permission; and audit trails that show logins to the data room, uploads, downloads and deletions. The best data rooms guarantee protection from hackers and viruses by compliance with international standards such as ISO27001.

Access controls
A data room doesn’t only restrict who can access the information. Permission protocols also manage user activity within the room. Each user can be set a profile that determines how they can interact with files: whether they are authorised to view all, or a specific set, of documents and folders, and if they are permitted to upload or download specific documents.  Access can be revoked if it is no longer necessary.

Authorised users can access permitted information from wherever they are, on multiple devices, whenever needed. This ease of access makes data rooms an essential platform for remote working teams and when engaging with external parties in financial transactions. Being able to find relevant information quickly is a key success criterion for M&A activity and engaging investors to secure funds.

Activity tracking and reporting functionality
Tracking tools monitor user activity inside the data room, such as document views, downloads, and interactions. Detailed audit trails and reports can be configured to show who has been in the data room, when and how long for, and what they looked at and for how long. Activity tracking is essential for compliance and accountability, and detecting potential security issues. It also provides valuable insights during transactions, such as M&As and fundraising rounds, by identifying a user’s level of engagement and areas of interest and potential disagreement. This knowledge can be used to initiate appropriate dialogue between parties.

Document management tools
Organising information in a way that is easy to locate is essential for internal teams and working with external parties. Good data rooms provide multiple tools to help structure and manage documents that help users navigate and find files easily. A highly useful tool is the ability to bulk upload documents and apply permissions during the process. Documents will be automatically indexed, which can be rearranged. Tailoring the folder structure to specific needs facilitates a smooth user experience when searching for information. Tools that enable clear and logical folder and document naming, categorising, ordering, and indexing help with this. A central, intuitive interface with search functionality helps the speedy access to information. It also provides companies with a composite view of all content being shared with internal teams and third parties.

Internal teams and due diligence participants rely on the uploaded information being accurate and up to date. A good data room will have automated version control tools and will enable easy updating and replacement of documents. Users are alerted when new documents are added and existing documents are replaced.

Collaboration and communication efficiency
Data room tools facilitate effective communication and collaboration within the data room. Interaction within the room is secure, accessible, and can be conducted easily from anywhere, at any time. There are countless scenarios where this facility is essential. To name a few: colleagues collaborating on a project; making HR policy changes available to employees; scrutinising documents during the due diligence process; sharing proposals and supporting information with customers and sales prospects; cultivating good investor relations with updated information. The risk of exchanging confidential information via emails and texts is removed, and the need for physical meetings and telephone calls is minimised.

A Q&A chat function efficiently manages questions and requests for information and callbacks from clients, investors, and employees. Notifications are instantly received when new questions are raised. These are tracked on a task dashboard and team members can be assigned the task of responding quickly.  Private questions can be answered individually and conversations that will benefit a wider audience can be made available. The time and admin involved in responding to commonly asked questions is reduced, allowing more time to focus on complex questions and information requests. Q&A interaction can be recorded for audit purposes and augment the valuable usage insights provided by data room activity tracking and reporting tools.

Assigning tasks and priorities
Tasks can be assigned for every time-sensitive project. This functionality is particularly important for meeting the critical deadlines integral to the due diligence process and for meeting the project targets of internal teams. Task management tools give companies the additional benefits of maintaining team alignment and increasing transparency, accountability, and productivity.

Ease of use
Good data rooms have an intuitive, user-friendly interface that allows even the least tech-savvy users to be able to use it quickly and easily. Navigating the platform and finding documents and folders should be achievable without having a technical background. The better data rooms provide set-up, configuration, training, and support as a standard part of their package. Some will also provide a dedicated project manager.

Custom branding
Branding is important for creating a professional and consistent image. A data room should allow the interface to be customised with the company logo during configuration.


We hope you find the information and advice in this checklist useful. If you would like to see how Perivan’s data room, Engage, can help you with all your data room requirements, please get in touch with the Perivan team to arrange a demo and answer your questions.



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Decorative pattern