Decorative pattern

Data rooms explained

January 2023

Data room explained blog


More and more companies are reaping the benefits of virtual data rooms. If you’re hoping to do the same, you need to know the basics first. 

Today’s blog will break down all you need to know about virtual data rooms, why they’re becoming increasingly vital for many industries, and the most common contexts where they’re so crucial. 


What is a virtual data room?

Sometimes known as a virtual deal room, a virtual data room is, at its core, an online repository for the secure storage and sharing of electronic documents. Data rooms are most often used in regards to due diligence for investors, audits, and financial institutions. The context would usually be a merger or an acquisition- more on that shortly. 

The popularity of data rooms has been growing steadily in recent years, which is largely due to businesses offering more of their services or products online, as well as conducting business online. These businesses need somewhere they can store, and share, sensitive information. 


What can a virtual data room be used for?

When it comes to the finalisation of mergers & acquisitions, virtual data rooms are one of the best ways to ensure due diligence. When a business is merging with another business or a business is acquiring another business, there will naturally be a large sum of documents involved. And a lot of those documents would contain information deemed sensitive by one, or both, of the businesses. A virtual data room is a reliable and secure environment for businesses to exchange said documents throughout negotiations. 

Data rooms are also often used during audits and compliance. One of the main hurdles businesses tend to encounter is the element of a third party, or multiple third parties, during audits. A virtual data room allows you to securely exchange all pertinent documents with external adjusters and regulators.


How much can you store in a virtual data room?

A virtual data room is capable of storing large amounts of data. You should be able to store as much data as you need to store, but this is dependent on which provider, and plan, you choose. If your business is a very big one, for example, you could go all out and pay for unlimited storage. It’s up to you, but whatever your needs are, there should be a data room plan to suit your business. 


How would a virtual data room benefit your business?

As we’ve now covered, virtual data rooms are a simple and secure way to streamline the storage and sharing of documents. But what are the other advantages of using a virtual data room


  • They allow you to increase accountability by controlling who has access to which documents, and tracking that activity
  • You can essentially store as much data as you need to, without having to worry about running out of room; this is particularly crucial when dealing with third parties, including external adjustors
  • There will also be a search function, allowing you to instantly find specific documents


Looking for an easy-to-use virtual data room? Book a demo today to find out why Engage by Perivan could be crucial for your business.

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Decorative pattern