What is the best virtual data room?
With so many virtual data rooms on the market, how do you know you are choosing the best one? For starters, the experience of any given data room provider directly correlates to the value they ultimately offer.
Seasoned online data room providers always ensure the security and availability of their platform and establish effective communication with the users. Other key features of the best data room software include a user-friendly interface, detailed analytics, flexible customization, comfortable pricing, and an option to test the tool for free.
A productive virtual data room comparison is a step to start with when choosing the data room. It should build off the evaluation of security measures, deployment solutions, and customer support.
How to choose virtual data room software?
- Define your digital data room requirements
- Estimate and allocate the budget
- Outline the necessary features
- Shortlist the virtual data room providers
- Use the free trial to test the software
By taking a close look at virtual data room offers from top virtual data room providers, we offer some advice to help you find the best value. This website goes deep down into the details to show you which virtual data room providers have the best balance between the choice of secure file sharing features and their pricing plans in this virtual data room comparison.
Use this checklist to compare virtual data room service providers and select the most suitable solution for your case.
To-do
Consider
1. Define your digital data room requirements
- Your company’s size and industry of operation
- The project’s specifics and estimated length
- The roles and functions of different people accessing your virtual data room
- The volume of secure cloud storage
- The overall level of technological comfort with similar tools
2. Estimate and allocate the budget
- How much you will save by switching to virtual data room software
- Different approaches to price formation in the VDR services segment
- The cost to value ratio of various virtual data room vendors
3. Outline the necessary features
- Who and how will be using the data room
- Obligatory and nice-to-have functionality for your case
- The dataroom security regulation specifics in your industry and region
- Your preferences in usability, accessibility, reporting, user management, file organization, and rights management
- Innovative approaches of top VDR providers
4. Shortlist the virtual data room providers
- The best data room providers with experience in your sector
- Years of operation and development milestones, such as acquisitions
- The ability to meet your budget and deliver the most optimal ROI
5. Use the free trial to test the software
- A full-feature experience for 30 days
- No-obligation guarantee from the data room provider
- An option to use the trial period for the secure virtual data room setup
As you can see, even though we’ve picked only the best data room providers, there are still many of them. That’s why you should start with understanding why do you need the online deal room for. What kinds of deals will you hold using it? Which functions do you need to feel comfortable maintaining your corporate documents? How often will you use it?
What to consider when choosing a virtual data room provider?
The global VDR market is saturated with many online data room vendors, all claiming to be the best virtual data room providers. The most important aspects to consider when choosing a virtual data room software is the providers’ experience, security certifications, expertise in the industry where your company belongs, and their pricing approach.
1. Software provider experience
When reviewing a VDR provider, look up their previous and existing clients. Look for companies you can trust. Pay attention to what business fields they represented the most and whether they had a good experience given the industry specifics. A lot of data room vendors showcase their clients on their websites, highlighting reviews from the most popular companies. Also, compare VDR ratings. There are some trusted review sites worth checking out offering top data room provider ratings. Ratings are typically given for software overall performance as well as in categories such as functionality, ease of use, support, availability, pricing, among others.
2. Compliance with data security certifications
Check whether the VDR service provider has been audited by ISO/IEC 27001:2013 Certified Data Centres or SOC 1 or SOC2 (Type I, Type II) Certified Data Centres. Also, take account of additional data processing terms as required under GDPR, for example, the obligation to secure protections from any subprocessor. If relevant for your business, check whether the VDR provider has compliance with HIPAA (Health Insurance Portability and Accountability Act) and sets the standard for sensitive patient data protection.
3. Expertise in your industry
A lot of VDR providers tailor the functionality of their software to the needs of a specific industry or use case, for example, M&A due diligence, legal operations, or real estate. By making sure your selected provider has experience in your industry, you can be sure of a successful and smooth transition to a digital data platform. Of course, some vendors claim to be suitable for any industry, offering different platform templates based on the type of project you will have. A software specialized for a particular business field, however, offers more guarantees that your individual needs will be met.
4. Pricing approach
Price is one of the main factors companies consider when choosing an online data room, but it should not be the deciding factor. Keep in mind that most data room providers offer a wide array of plans to choose from and with some of the most advanced features include in the more expensive plans.
Depending on the duration of the deal, the number of users, and the required storage volume, it is necessary to compare different pricing plans. Costs vary drastically among providers. Some virtual data room service providers offer flat rate pricing — a monthly fee that includes unlimited storage, users, data, etc. This option is budget-friendly and prevents any surprises regarding VDR expenses. Some vendors also offer flexible billing — monthly, quarterly, or annually — with additional discounts when choosing a longer-term plan.
Once you answer these questions, it will be easier to determine your requirements and realize what you’re looking for. Another thing you should do is to figure out your budget. Virtual data room providers set different prices for their services. And sometimes you pay more only for the well-known brand while the software itself is fairly mediocre. Therefore, you should know in advance how much money are you ready to spend on the data room. It will help you to instantly drop options that are too expensive so that you don’t overpay.
Then you can go through features different providers offer and pick the options that suit your requirements the most. At this point, you want to consider additional criteria. First of all, we advise you to prefer the providers that offer a free trial. It will help you to test the software and see on practice if it fits your business. Pay attention to the interface – how easy is it to use, how well are the features organized. You want to get the software that won’t require any training.
Compare the virtual data room providers
Best for:
Corporate due diligence, M&A, real estate management, board communications, life sciences, and corporate restructuring
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: iDeals Solutions is one of the top data room providers for various-scale businesses across many sectors. iDeals combines the best VDR software security practices with versatile feature sets and user-oriented adaptability. Online data rooms by iDeals are known for a multi-layered approach to data safekeeping and streamlined due diligence workflows.
- A comprehensive set of security features including dynamic watermarking, single sign-on, and 99.95% server uptime
- Up to 8 levels of access privileges
- Proactive customer service that speaks multiple languages
- Compatibility with all major operating systems and devices
- Occasional technical difficulties
Best for:
M&A lifecycles
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Datasite is one of the best data rooms for M&A for large and enterprise-scale companies. Coming from an extensive legacy of a financial printing business, Datasite offers particular value to investment banks and law firms undergoing M&A. The electronic data rooms from Datasite deliver comprehensive merger and acquisitions experiences along with the provider’s other products and services.
- Extensive expertise in financial markets and M&A
- UK-based technical support and project managing teams
- Utmost protection of corporate data and internal transactions
- Lack of solutions for small and medium businesses
- Unintuitive interface and navigation
- Complex pricing with hidden fees
Best for:
M&A and IPO in legal, healthcare, and financial sectors
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Citrix Systems is one of the M&A data room providers with a focus on simplifying due diligence. ShareFile offers secure, easy-to-navigate solutions with all the basic features necessary for a staple data room experience. ShareFile reportedly offers the most value to users who have purchased other products by Citrix.
- Intuitive user interface with simplified file-sharing
- White labeling for brand image enhancement
- Integrations with Office 365 and RightSignature
- No option to manage multiple files simultaneously
- Overcomplicated access control
- Inflexible, per-user pricing model
Best for:
M&A, Sale of assets, Board reporting, Raising capital, Real estate transactions, Business development negotiations
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: The CapLinked VDR software offers more secure, straightforward, and faster document management and exchange. It allows a user to access and share data 24/7 from any device without risks, which significantly speeds up workflows. Additionally, the CapLinked data room is crucial for due diligence, too. It facilitates reviewing and analyzing documentation, provides guaranteed data protection following international compliance standards, such as SOC 1, SOC 2 Type II, and HIPAA, and reduces the number of administrative staff.
- Ease of use without compromising safety
- Administrative granular access control over each user
- Good value for money, according to user reviews
- Permission features may be confusing for some users
- Outdated interface design compared to other providers
- Inviting participants to the platform can be difficult
Best for:
M&A Due Diligence lifecycles
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: DealRoom is another one of the M&A segment VDR service providers. The provider takes a multangular approach to mergers and acquisitions by offering solutions for every participating side of the project, considering their industry and deal handling practices. DealRoom is a suitable virtual data room business provider for medium and large companies at any stage of the M&A cycle.
- Well-organized document management capabilities
- Customizable document security
- Advanced collaboration tools such as user tagging
- Users need to undergo several settings’ stages to restrict access or configure rights
- Takes a long time to understand the platform
- Poor file tracking in terms of document status updates
Best for:
M&A, real estate management, and investment banking
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Firmex is a Canadian data room provider specializing in assisting small and medium companies across all major sectors. Firmex combines simplicity with practicality to deliver comprehensive, robust solutions. Firmex is a suitable solution for projects with low staff count and minimal digital data room requirements.
- Intuitive interface and sensitive data protection mechanisms
- Responsive and proactive customer service
- Several levels of access privileges and dynamic watermarking
- No online chat to reach the technical support
- Inconvenient pricing for short-term projects
- Poor file tracking capabilities without an option to see old versions or restore accidentally deleted documents
Best for:
Ansarada is clearly a solution designed for the big fish, and as such it’s a nice fit for corporate deals and transactions such as due diligence for M&A, overall deal management, and post-deal integration. It’s also an ideal tool for mitigating governance risk and compliance, overseeing tender lifecycles, and managing board planning and other actions.
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: With 17 years of practice in the game, Ansarada is more than your bread-and-butter virtual data room provider. With Ansarada, you’ll get access to every resource necessary for clean, transparent, and smoothly-executed transactions. This includes thorough audit trails, access controls, and a slew of other advanced data protection features. As a pioneer in the field of AI for data insights, the Ansarada data room also deploys some powerful tools for dealmaking, including its AI Insights, Workflow, and Board Management features. Ansarada is one of the ultimate solutions for big dealmaking in any field, from legal to pharma to financial services and technology.
- High level of security. Ansarada deploys a multitude of security features to ensure a 100% protected data environment. This includes file control levels, comprehensive audit trails, and bank-grade encryption.
- Bidder engagement score. Among its many AI-based features, Ansarada gives the data room admin a score that evaluates bidder interest based on their interactions with data room content and predicts the outcome of a deal.
- Instant customer care. An often-praised feature of Ansarada is their dedicated and friendly customer service, available 24/7.
- Expensive. The platform is pricier than many of its competitors, which makes it a less-than-ideal option for companies that don’t require the whole breadth of features available and would rather not pay big bucks for a data-management tool.
- Unintuitive design. Getting used to the platform can take longer than with similar services, as reported by some users.
Best for:
M&A lifecycle, due diligence, company audits or onboarding, and training new staff.
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: FirmRoom is a simple, but effective VDR solution. Powered by a young and motivated team, the SaaS platform offers all of the essential tools for streamlining work with large amounts of files. This includes bulk upload/download, drag-n-drop, and easy sharing of documents. Certified by SOC-2 and ISO 27001, and compliant with HIPAA, FINRA, and SEC, the cloud-based service ensures your sensitive data is secured by military-level data encryption.
- Value for money: The FirmRoom data room is an inexpensive solution, offering all essential VDR functionalities at a low cost
- Intuitive design: The platform has a simple build and is easy to navigate
- Customer support: FirmRoom emphasizes a human approach, with a friendly and eager-to-help support team
- Compatibility and deployment: FirmRoom has only a web-based platform, without any dedicated apps. While it runs well on Chrome, the service has been reported to be slower on other browsers
- Fewer functionalities: The platform offers fewer analytics/audit trail resources than some of its competitors
Best for:
From law firms working on big cases to major corporations closing a merger or acquisition
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Vault Rooms provides a solid platform to host, send, receive, and manage data in a highly secure environment. Its RLM feature is particularly useful as a way to organize the inflow of documents from clients or partners, sparing you plenty of headaches and saving time.
- Good storage interface. Highly intuitive file management interface, saving users’ time and energy
- Security. Vault Rooms is extremely focused on the security of its users, and it delivers one of the most all-around protected environments for cloud-hosted VDRs
- Request List Management. The RLM feature designed by Vault Rooms is a great way to optimize workflow for collecting and storing documents
- Price. Its most basic pricing plan will set you back nearly $200 monthly, which isn’t by far the most competitive option in the same range of providers
- Inadequate file viewing. Because it doesn’t allow users to open several files at the same time, the viewing/comparing process can be significantly slowed down
Best for:
Imprima offers valuable software for companies of any size across a variety of industries. Thanks to its cutting-edge technology, expertise, and experience on the market, Imprima data room is extremely useful for professionals working with M&A, capital raising, IPOs, real estate transactions investments, and portfolio management.
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Imprima provides a satisfactory level of security, essential organization, and fast sharing. Imprima can accommodate any real estate transactions, asset businesses, and IPOs, ensuring a seamless and structured document sharing process. M&A teams are given the tools that enable them to have users’ activity reports, giving greater clarity and insights with regard to the possible opportunities for better decision-making. The data room software offers a variety of assets for life-cycle management, raising capital, real estate transactions, mergers and acquisitions, and IPO.
- Al tools for automated redaction
- 24/7 top-rated customer support service
- Advanced security practices and GDPR compliance
- Sending out invitations and selecting file security settings is very slow and inconvenient
- No free trial for users to test before purchasing
Best for:
M&A due diligence, fundraising, internal collaboration
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Digify is another one of the M&A-oriented virtual data room companies that works with small and medium businesses in multiple sectors. Digify concentrates on delivering tools for advanced file-level security and workflow centralization across different platforms. Apart from facilitating mergers and acquisitions, Digify VDR solutions also create a platform for all fundraising stages.
- Advanced document security and digital rights management
- Streamlined document sharing
- Accessible technical support
- Inconvenient indexing and large downloading procedures
- Difficult to navigate interface
- Occasional external access issues
Best for:
M&A, due diligence, investor reporting, asset sales
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Finsight is an expert in the financial industry, so DealVDR and its companion software solutions are meant primarily for use by financial institutions. Finsight counts among its clients GoldmanSachs, BNP Paribas, and Crédit Suisse. However, companies such as Dell, Domino’s and HarleyDavidson are also among DealVDR customers — which comes to show that Finsight products can serve large corporations across widely different industries.
- DealVDR customers report its customer service is outstanding.
- With DealVDR, you know exactly what you are getting and not getting — the provider’s website candidly lists six features their product doesn’t offer yet.
- As of April 2022, there are no DealVDR reviews on independent review websites, so it’s not possible to know if users report any downsides to using this software.
Best for:
M&A, IPOs, and SPACs
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Venue virtual data room comes from a line of financial products by DFIN and caters primarily to medium and large businesses within the finance sector. Along with the other DFIN solutions, Venue facilitates complex deals via advanced technologies and advisory. Compared to its competitors in the segment, Venue lacks feature flexibility and deployment solutions for agile deal processing.
- Security features include multi-factor authentication and automated watermarking
- Real-time insights reports
- Region-specific proactive customer service
- Complex pricing with hidden fees and surcharges on large corporate data volumes
- Lack of mobile deployment solutions
- Slow simultaneous processing of multiple files
Best for:
M&A, fundraising, and IPOs
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: SecureDocs is a straightforward data room for on-the-go decision-making and collaborative projects. While lacking feature versatility, SecureDocs offers a sufficient foundation for mergers and acquisition processing for small and medium companies in various sectors. Compared to other M&A data room providers SecureDocs is relatively easy to install and navigate, allowing deal processors a substantial time advantage.
- Fast-to-setup intuitive interface
- Affordable pricing for small and medium long-term projects
- Granular access control
- Complex cost formation with extra data rooms charged separately
- Short free trial period
- Hard-to-reach technical support
Best for:
M&A, bankruptcy, restructuring, board reporting, IPOs
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Dealspace by Intralinks is an ultra-sophisticated solution for complex deal management in large and enterprise-level companies. Dealspace online data room services are based on process automatization and pre-configured workflows combined with precise product tailoring. Dealspace is an equipped virtual data room for due diligence and other M&A phases.
- Detailed analytics on usage and confidential data handling
- Intuitive interface with a straightforward file upload process
- Pre-established M&A data exchange workflows
- No test period option other than a free demo
- Inconsistent pricing approach with hidden fees
- Incompetent technical support
Best for:
M&A, alternative investments, restructuring, bankruptcy, and educational organizations.
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: SmartRoom is the flagship product created by BMC Group. The BMC Group was founded in 1998 and provides various business solutions. SmartRoom was developed as a next-generation content management system and was created in collaboration with IBM M&A Accelerator. SmartRoom delivers value for companies of any size across several sectors by combining cutting-edge technology with over two decades of experience.
- Enhanced efficiency via automated synchronization and advanced reporting
- Bank-grade security via secure links and detailed permissions
- Accelerated success of the entire business operation, from IT departments to end-users
- Quote-based pricing
- No free trial
Best for:
Financial Services, Investment Management, Law Firms, Accountants
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Clinked positions itself as a one-stop shop for team collaboration. Its software solutions include client and partner portals, private clouds, and a SharePoint alternative. Additionally, it offers tools for file sharing, communication, collaboration, intranet, and project management.
- Competitive price
- Custom user interface design and features
- No trial available
- The ease of use of the software is poor
Best for:
Real estate and legal
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: WatchDox offers a collection of remote collaboration tools that can be used as virtual data room software. Designed by the former cell phone market leader Blackberry, WatchDox introduces a satisfactory level of technological advantage and enhanced security. WatchDox can accommodate legal and real estate businesses of all sizes, delivering the most value to long-term internal collaboration projects.
- Robust approaches to digital rights management and document sharing
- Transparent workflows
- Adaptive interface
- Lack of feature versatility for complex, multi-stage deals
- Poor user experience in mobile applications
- Often server delays during data uploads or settings’ adjustments
Best for:
Real Estate Management, for the European market.
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Drooms offers virtual data room solutions with multiple features for the real estate industry. It is generally used to manage and sell real estate assets in a convenient and user-friendly environment. The company uses modern solutions like artificial intelligence (AI) and application programming interface (API) integrations to provide a top-notch user experience.
- Multi-language support
- High-quality customer support
- The interface isn’t intuitive
- File searching doesn’t work with all formats
- Subscription plans are expensive
Best for:
With all the features DocSend provides efficiency to investors, portfolio companies and start-ups. The DocSend data room is mostly used for effective board management, fundraising, investment research, recruiting, and sales.
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: With DocSend you can track where attention is focused during different rounds of fundraising. The whole process of capital raising becomes much more organized and easier to keep a hold of with data rooms made for proactive and personalized collaboration. Professionals can also use DocSend as a sales insight tool to strengthen prospective relationships, improve customer experience, raise prospect engagement, and organize creative assets.
- Comprehensive and powerful analytics
- Simple insights and reports
- Advanced document control
- No features for video integration
- Unresponsive, difficult to reach support
Best for:
European market. M&A transactions, property management, intellectual property protection, biotech outlicensing, financial services
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Brainloop DealRoom helps real estate managers keep their portfolio content up-to-date, easily make it available to potential buyers, and allow bidders to make confidential offers. When it comes to protecting intellectual property, DealRoom ensures IP stays confidential and is easily accessible by authorized partners. When necessary, DealRoom can be integrated with other Brainloop software, allowing companies to securely share data during board management processes and in a larger context of team collaboration.
- Intuitive customers report
- Easy-to-use virtual data room
- The setup process is quick
- The Brainloop data room is not an advanced VDR solution, so companies that need more than basic data room features should look for another provider.
Best for:
ShareVault is an excellent solution for companies from small to big in the financial, legal, and life science sectors.
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: A solution favored by Fortune 500 companies including giants in pharma, banking, and the oil industry. The company aims to secure all data transactions while facilitating the workflow for gathering, reviewing, editing, and sharing documents of critical importance. With the ShareVault virtual data room, you can organize your files, track user-data interactions within the platform, and conduct data-intensive transactions such as due diligence without fear of leaks, ransomware, breaches, or any other risk to sensitive documents.
- Military-level security. A bevy of file control features and user analytics join with powerful encryption technology to ensure documents are sent, received, and stored in utmost safety.
- Seamless design and operation. The ShareVault data room deploys a multitude of resources for document management and sharing, giving you full control over all activities on the platform.
- Integration. ShareVault blends organically with your pre-existing technology stack, including OneDrive, DocuSign, and Dropbox.
- Difficult to orient. Some users report finding the abundance of resources and options too overwhelming, so people who are less tech-oriented may take some time to adapt
- Folder structure. The file uploading/tagging process is a bit tedious and demands a more hands-on approach than other providers
Best for:
File storage, Client portal, FTP alternative, Remote work
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Onehub is a virtual data room provider that helps businesses store and share sensitive data securely. The service opens access to multiple features for security, file sharing, and customization. Created by a team of enthusiasts, the company aims to design modern business software that is enjoyable to use. Onehub’s remote collaboration tools are suitable for businesses of all sizes, as the provider includes flexible pricing terms.
- Business-friendly pricing models
- Fast & easy registration
- User-friendly interface
- No offline version
- No way to tag files & documents
- The interface is somewhat outdated
Best for:
Law firms, M&A, financial institutions, investment banking, healthcare, education.
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Open Source CM offers the most value to CEOs, CFOs, and contract managers of small and medium companies across multiple sectors. Open Source contract management tools that bring the most advantage to its users include an integrated event calendar with auto-reminders, index search, metadata scanning, and pre-configured workflow templates.
- Minimalistic, user-friendly interface
- 24/7 live representative support over the phone, email, and chat
- Advanced contract management and processing tools
- Lack of interface and functionality customization capabilities
- Only available through browser access without mobile access solutions
- Full-feature packages are only suitable for enterprise-level companies
Best for:
Secure file sharing, document signing, and remote collaboration.
Typical customers:
- Freelancers
- Small businesses
- Mid size businesses
- Large enterprises
Provider review: Box positions itself as a secure solution in many industries, including financial services, government, education, healthcare, and retail. It is also a reasonable choice for various company departments — from sales to engineering.
- Dozens of advanced security measures
- User-friendly interface
- Hundreds of integrations
- Some users report crashes when uploading too many files at once
Virtual data room functionality
Virtual data rooms are used across multiple industries by various sized businesses to ensure effective and secure document sharing. Virtual data rooms provide a collaborative platform for multiple parties to share, access, and review confidential documents securely. Depending on the specifics of a business or a project, VDR functionality can be tailored to meet the customers’ needs.
Most data room providers ensure high data and access security. However, the most comprehensive security certification to look for is ISO/IEC 27001:2013 certification — a leading international information security standard. Recently, some virtual data room vendors started getting an additional certification for personal data security for cloud services — ISO/IEC 27018. Having this standard certification is proof that the provider is trustworthy and safeguards customer data.
A standard data room software should have the following functionality:
- High data security standards
- Instant access regardless of location/time/device
- Extensive data management functions
- User management and access security
- Reporting and analytics
- Customization options
While conducting your search, you need to take into account that no two virtual data rooms are the same and some will be useful for certain types of projects such as due diligence and M&A transactions, while others will be useful for things such as case studies and document repositories.
What features should the best data room have?
So, how do we understand which provider offers the best deal? The key is to understand the variety of features present in solutions by top virtual data room providers and then determine which is best for your business needs.
- Multi-factor authentication. The best virtual data room providers establish multiple steps of user verification to reduce the risks of the unsolicited activity and closely monitor each user’s actions inside the VDR. The authentication process typically involves a password and a verification code sent to an email or a cell phone number.
- Built-in virus scan. Virtual deal rooms are always on the hackers’ radars. Constant virus and vulnerability scans allow building a shield against potential malicious activity and minimize the chance of data leaks or information mishandling.
- Drag-n-drop uploading. An ability to upload files in bulk by dragging them inside the data room online saves a great deal of time and allows deal handlers to focus on more substantial matters. Versatile format support goes hand-in-hand with this feature.
- Digital watermarks. Secure data room services provide several levels of file protection. Digital watermarking allows insulating sensitive documents without affecting their functionality for authorized users. Such watermarks also imprint the information of each accessing user, which creates an extra level of protection against internal leaks.
- Auto-indexing. This feature minimizes the efforts to organize large document volumes inside the data rooms. Indexing adjusts as the data gets rearranged and allows users to find the necessary documents in seconds.
- View as. Knowledgeable data room providers will let administrators enter the VDR space from the perspective of any user. This way, you can ensure all the rights are correctly assigned, and every participant will have a comfortable and productive experience using the virtual data room services.
- Granular permissions. There will always be multiple layers of permissions inside the best data rooms. On top of that, the software may allow you to assign privileges on the user level, duplicating the competency framework inside your organization.
- Q&A. Streamlined Q&A management is fundamental to due diligence, M&A, and even internal collaboration. The best virtual data rooms integrate the Q&A functionality into the interface, creating a transparent and manageable query resolution flow.
- Audit log. Activity reporting is a must-have feature for reputable electronic data room providers. Such reports can help you oversee the project better, attract attention to the neglected areas, ensure utmost data safety, and establish better accountability.
- 24/7/365 user support. Make sure that the data room provider you choose offers access to multilingual, responsive customer support. Look for the guarantees of fast response time and single-point-of-contact resolution.
Virtual data room set up
To ensure a smooth transition to your new VDR, consider following these steps:
- Gather all the necessary data and follow a specific file naming system
- Have a clear vision and create the internal structure of your VDR (use folders, subfolders, access levels, categories, etc.)
- Upload all files (VDRs typically have an automatic index numbering that numbers folders and documents sequentially as they are uploaded)
- Create groups of users, set access permissions
- Double-check everything and test functionality
- Invite team members to begin work
- If necessary, seek training for your team
At first glance, all online data room providers look rather similar. They all have pretty much the same features, offers, and approaches. Although, when you take a closer look, you can see that there are differences between them and different virtual data room pricing approaches. Therefore, to choose the best virtual data room for your needs, you have to invest some time into the research. Use our guidelines to compare virtual data rooms and pick the best solution for your project.
Data room use cases
Virtual data room services are used for various business deals and processes. Here are a couple of examples.
M&A due diligence
Virtual data rooms for Mergers and Acquisitions Due Diligence offer an opportunity to create a Due Diligence Data Room online and replace the physical deal room securing all sensitive legal, financial, sales, marketing, and human resources documents in one central, a virtual place.
Real estate transactions
Online data room assists real estate transactions with keeping all documents, such as building construction plans and data, NOCs, insurance, mortgage documents, land register entries, contract of sale, etc., in a safe environment for all involved parties to access.
Fundraising / capital raising
When managing a deal with potential investors, it is necessary to disclose confidential information. VDR provides a safe way to do it while protecting companies’ intellectual property.
Investment banking
Investment bankers use VDR software to share information with qualified buyers. Ability to view who has accessed the files, for how long, and what exact pages, are of particular benefit to investment bankers.
IPO
Some data rooms are specifically equipped for the IPO preparation process. VDR helps efficiently share large volumes of documentation with potential share buyers. As going public is a very time-consuming and stressful process, a company must remain transparent, consistent and share necessary information promptly. VDR is a perfect tool for that.
Licensing / legal document management
A virtual data room can help a law firm and its customers communicate in a secure virtual environment. VDR allows both parties to view, update, sign confidential documents and contracts virtually.
Corporate repository
Corporate Repository holds and archives the most sensitive company information. A virtual data room can help distinguish document access and permissions among employees.