How to Choose the Right Virtual Data Room

Wondering which virtual data room is right for you?
Here’s our quick guide to choosing a virtual data room to match your business needs. The core question you should ask yourself is what you will use the data room for.

1. Understand the purpose

Knowing why and how you will use a data room will let you set realistic expectations and make an informed purchasing decision.

  • Deal types you will use the virtual data room services for: M&A deals, due diligence, fundraising, etc
  • Users who will access the data room online
  • The period you’ll use the data room
  • Data hosting storage you will need for a deal
  • The affordable budget you are ready to invest in data room services

2. Read user reviews

User data room reviews will substantially ease your VDR selection:

  • VDR’s rating on virtual data room review sites
  • Security concerns reported by other users
  • Provider’s feedback compared to the closest data room competitors
  • The authority of data room reviews
  • Virtual data room provider’s position in the top VDR listings.

3. Check the provider’s virtual data room market experience and reputation

Choose data room software from a reputable data room provider with a solid track record in their industry and overall reputation.

  • Data room vendors with first-hand industry experience and a positive reputation
  • A solid track record across multiple fields and domains, like biotech, real estate, M&A due diligence, and finance deals​.

4. Compare the provider’s pros and cons

Having selected your best-matching VDR provider, inspect its capabilities, consider user feedback, and define its pros and cons:

  • The vendor’s data room features compared to the top online data room providers
  • The availability of easy drag-and-drop functionality and user invites
  • The data room’s pros and cons from user reviews
  • The vendor’s pricing structure
  • The vendor’s cost-effectiveness compared to other virtual data rooms

5. Communicate with support

A reliable customer support 24/7 team protects your online data room experience, accelerates onboarding, and tackles arising challenges:

  • 24/7 responsive support team availability
  • Customized chat, email, and phone support options
  • Transparency and openness of customer support regarding the product
  • First-hand tech support behind the data room software
  • Customer support quality as compared to other electronic data room providers

6. Request a free trial

Free trials let you know whether the chosen VDR caters to your needs:

  • A 30-day free trial is available
  • A free trial allows for a customized user experience instead of a free demo
  • A free trial commitment with no hidden fees
  • Does this vendor charge automatically upon free trial expiration
  • Customer support and guidance during the trial period.

7. Check for key data room features and document security

  • Drag-and-drop uploads, granular user permissions, and watermarking
  • Built-in document redaction AI search
  • Certifications like ISO 27001, SOC 2, GDPR, and HIPAA compliance.

8. Beyond the essential features, consider the practical use of VDRs

  • Leverage training opportunities for your team members
  • Watch out for extra fees for additional data or users
  • The trial run will tell you if the tool meets your needs and fits your team’s expectations
  • Compare the cost vs. value across VDR providers to make an informed decision.

We’ve listed essential steps to help you opt for the best-fit VDR provider. Learn more about VDR pricing structures.

How to compare data room providers?

The best way to compare top data room providers is to analyze core VDR capabilities. Make sure your VDR vendor deploys key features compliant with the best practices of the best virtual data room providers:

Focal areaKey features
Document management features to set up a robust data room ● Auto-indexing
● Bulk uploading
● Data rights management
● Advanced search functions
Access security to ensure maximum data protection ● IP restrictions
● Password strength settings
● Two-factor authentication
● Granular permissions
User activity tracking and reporting to track information flows ● Activity audit logs
● Customizable reports
● Detailed access tracking
● Exportable statistics
Ease of use to ensure diverse multilingual experience ● The availability of multiple languages
● Comprehensive dashboards
● Drag-and-drop interface
● Mobile access
Value for money to check whether other providers offer similar features ● A great depth of reports
● Convenient drag-and-drop upload
● Support availability
● Flexible pricing plans
Ideals
DataSite
Securedocs
Digfy
Dealroom
Solutions
  • M&A
  • Real Estate
  • Life Science
  • Restructuring
  • M&A
  • Healthcare & Life Sciences
  • Real estate
  • Restructuring
  • Medicine and healthcare
  • Business and management
  • Investments
  • Agriculture and infrastructure
  • Investment management
  • Financial services
  • Training and education
  • Healthcare and medical research
  • Healthcare
  • IT Professionals
  • Manufacturing
  • Accounting
Pricing Plans
  • Pro
  • Business
  • Enterprise
  • Unknown
  • 3 month plan
  • 12 month plan
  • Volume Packages
  • Pro
  • Team
  • Business
  • Enterprise
  • Starting price 375$/month
Trial Period
  • 30 days
  • No
  • 14 days
  • 7 days
  • 7 days
Document Management
  • Drag-and-drop file upload
  • Bulk upload/download
  • File labels (Business-only)
  • Digital watermarks
  • Drag-and-drop file upload
  • Integrated (no-plugin) IRM
  • Drag&Drop upload
  • Automatic document indexing
  • Digital watermarks
  • Drag-and-drop file upload
  • Document preview
  • Multi-format support
  • Dynamic watermarking
  • Full-Text Search
  • Secure file collection
User Management
  • Single/bulk user invitation
  • Detailed user permissions
  • Excel viewing permissions
  • Granular group permissions
  • View As
  • View only
  • Audit Trail
  • View only
  • Granular group permissions
  • User authentication
  • Permissions on user level
  • View-only access
  • Click trails
  • Advanced analytics and reporting
Q/A
  • Yes
  • Yes
  • Yes
  • No
  • Yes
Security certifications
  • ISO27001
  • SOC2 compliant
  • ISO/IEC 27001
  • SSAE SOC 2 Type II
  • Privacy Shield
  • FedRAMP
  • SSO integration
    256-Bit
  • SSL/TLS Encryption
  • ISO 27001
  • GDPR
  • HIPPA
  • Data Center Certifications
  • SOC 2
  • SSAE 16 audits
Security
  • General Data Protection Regulation
  • California Consumer Privacy Act
  • 256-bit encryption + 2048-bit keys at rest and in transit
  • Multi-factor authentication
  • Protected infrastructure
  • Personnel security
  • 2 -step verification
  • Security in all phases
  • Multi-factor authentication
  • Protected infrastructure
  • Operational security

 

  • Bank-level encryption
  • Two-factor authentication
  • Multiple data storage locations around the globe

 

Support
  • 24/7/365
  • Phone
  • Email
  • Live chat
  • 24/7/365
  • Unlimited training
  • Email/Help Desk
  • FAQs/Forum
  • Knowledge Base
  • Phone Support
  • Help Center + chat and email support for Pro subscribers
  • Phone support for Team subscribers
  • 24/7/365
  • Phone
  • Email
Deployment
  • Public cloud
  • Mobile App: Android, IOS
  • Desktop App: Windows only
  • Browsers supported: Chrome 79, Firefox 78, Safari 13, MS Edge 90
  • Cloud, SaaS, Web-Based
  • Mobile App: Android, IOS
  • Desktop App: No
  • Browsers supported: Google Chrome for Mac or Windows, Mozilla Firefox for Windows and Mac, Microsoft Internet Explorer (version 10 or newer), Microsoft Edge
  • Mobile App: No
  • Desktop App: No
  • Browsers supported:FireFox, Safari, IE, but Google Chrome is mostly recommended
  • Mobile app:Androind + iOS
  • Desktop app: Windows + OS X clients
  • Browsers supported:Google Chrome, Firefox
  • Mobile App: N/A
  • Desktop App: macOS, Windows
  • Browsers supported: Unknown
Pros
  • Industry-leading 99.95% uptime
  • No maintenance windows
  • Individual sales approach
  • Free Preparation
  • The Sandbox feature
  • Unlimited number of users, docs, and storage in their plan
  • Affordable for smaller deals (5 admins, 1 room)
  • Offers 4 plans (Pro, Team, Business and Enterprise) to better suit the customer’s needs.
  • Provides a generous storage offer of 100 GB
  • Easy to use
  • Outlook Plugin
  • Upload files up to 100GB
Cons
  • No-plugin encrypted PDF
  • Sophisticated pricing with hidden costs
  • Screen blocking doesn’t limit phone screenshots
  • No conversion of Excel files
  • No desktop sync
  • Doesn’t offer projects that last less than 3 months
  • A project minimum cost of $1,200
  • Each additional data room for SecureDocs is charged separately
  • No chat on the website
  • Limited global presence and support
  • No free USB delivery
  • Aggressive pricing strategy
  • Small headcount
  • Drag and drop
  • Complex and deep folder structures
  • Long upload speed

The Best Features to Look For in a Virtual Data Room

With countless data room providers on the market, knowing which one meets your specific needs isn’t always straightforward. To simplify your choice, we’ve compiled a overview of essential features and advanced options you should expect from a reliable virtual data room.

Core virtual data room features

These are the features found in almost every data room provider on the market.

archiving feature of data rooms
Archiving

All online deal room providers allow quick access to the target’s records. This comes in handy for referencing previous deals, accessing historical data, and optimizing governance.

activity tracking feature of data rooms
Activity tracking

The activity reports will tell you who accessed each file, when the file was accessed, and for how long the file was accessed, so users may oversee data room activities and security measures.

watermarking feature of data rooms
Watermarking

Adding dynamic watermarks to documents is an excellent approach to limiting unwanted duplication and sharing. Dynamic watermarking disables file distribution without appropriate crediting.

permission customization feature of data rooms
Permission customization

Assumes an intuitive access hierarchy setup with permissions for standalone documents and entire data room segments.

branding feature of data rooms
Branding

The standard solution for customizing a data room is to add a corporate logo and brand colors.

analytics and reporting feature of data rooms
Analytics and reporting

Interactive analytics, dynamic infographics, and up-to-date reporting

Advanced virtual data room features

Prioritize advanced features while choosing the best data room provider for your business needs.

green folder and two arrows (up & down)
Bulk uploads and downloads

Adding and retracting confidential data in bulk is time-saving and ensures an agile VDR experience.

document with a lined overlay
Fence view

A security feature for highly confidential documents that obscures document content on the screen to prevent photography or unauthorized viewing of the full page​.

simple green gear icon
AI-powered tools

Automatically extract key terms from documents or suggest data room index structures. ​

a green window frame with layout blocks
Specialized interfaces

User-friendly interface templates for specific projects.

a green puzzle piece connected with a cloud symbol
Application integration

Integrating the data room with cloud-based storage services like Google Drive and Microsoft OneDrive simplifies the use of data management features.

two overlapping green bubbles
Interactive collaboration tools

Advanced features like polls, live chats, and Q&A can organize, significantly streamline, and improve any data room process and the ways teams communicate.

a green puzzle piece gear the letters API
API integration

Rearanging the interface to your company’s specific needs and preferences is an option featured by the best virtual data rooms.

magnifying glass with a filter
Advanced Search with Filters

Allows users to quickly locate specific documents or data within the virtual data room. By applying custom filters, teams can reduce time spent on manual searches.

Secure Due Diligence with Virtual Data Rooms

Leading data room providers deliver a secure online workspace for due diligence processes, allowing users to store, manage, and share sensitive data with partners, investors, and buyers throughout the deal process.

Beyond simple storage, virtual data rooms offer centralized document control, advanced access permissions, and activity tracking, ensuring confidential business data remains protected and accessible only to authorized parties.

Key advantages that make virtual data rooms essential for due diligence include:

  • Accessibility: Secure access for parties across multiple locations and time zones.
  • Audit Trail: Track document views and interactions for better oversight.
  • Confidentiality: Controlled access to protect sensitive and confidential information.
  • Cost-Effectiveness: Cut costs related to traditional data room management.
  • Efficiency: Well-managed and easily accessible documents streamline the due diligence process.
  • Transparency: A clear and comprehensive overview of the target company by stakeholders.

Use cases for virtual data rooms

Virtual data room software offers versatile benefits, making it suitable for various business scenarios where secure document management is critical:

  1. Bankruptcy & restructuring
  2. Financial due diligence
  3. Legal due diligence
  4. Fundraising and investment rounds
  5. HR due diligence
  6. Initial Public Offerings (IPO)
  7. IP licensing
  8. IT and cybersecurity
  9. Legal and Litigation
  10. Mergers and acquisitions (M&A) due diligence
  11. Operational due diligence
  12. Real estate deals


Bankruptcy & restructuring

Data room software serves as a central hub for managing creditor communications, distributing restructuring plans, and sharing updated financial disclosures. It simplifies claim collection, supports coordination with legal advisors, and ensures stakeholders can securely access essential documents, from restructuring proposals to liquidation reports. With clear document control and audit trails, VDRs help administrators manage complex negotiations, obtain creditor approvals, and meet regulatory requirements.

Financial due diligence

Virtual data rooms enable investors to assess a target company’s financial records before making informed investment decisions. These secure platforms facilitate financial data sharing, letting potential investors analyze the target company’s position.

Legal due diligence

During due diligence, legal teams review the target company’s legal standing, including contracts and liabilities. VDRs offer a centralized location for storing and accessing legal documents such as contracts, litigation records, intellectual property rights, and regulatory compliance documents.

Fundraising and investment rounds

Due diligence is compulsory for startup entities as part of the fundraising process. Fundraising due diligence is a pivotal process allowing potential investors to assess the startup’s credibility. This way, investors check whether the target entity is legally compliant, financially sound, and well-positioned. 

HR due diligence

The process helps parties appraise the target company’s human resources, corporate workforce, policies, and organizational culture. Stakeholders store personnel information in online data rooms to review human capital.

Initial Public Offerings (IPO)

The IPO process entails extensive due diligence to ensure the accuracy and completeness of disclosures, as well as their compliance with regulatory requirements. Legal advisors and underwriters carefully review the target’s financial records, corporate governance, and potential risks.

IP licensing

Due diligence assesses the target company’s intellectual property in terms of its market value and legal status. VDRs are secure environments for sharing sensitive IP data, like patent applications, licensing contracts, and trademark registrations.

IT and cybersecurity

The due diligence process assesses the target company’s IT infrastructure, operational systems, and cybersecurity protections against data breaches. VDRs are secure repositories enabling the authorized participants to share IT documentation, audit reports, and security policies to assess the target company’s technological capacity and potential vulnerabilities. 

Legal and Litigation

Law firms leverage VDRs to manage case files and evidence, especially for litigation or discovery purposes. They ensure only authorized parties can access and share sensitive documents with logs to track viewers’ actions.

Mergers and acquisitions (M&A) due diligence

The buy-side M&A requires a thorough evaluation of the target company’s legal, financial, and operational standing. Virtual deal rooms enable the sell-side M&A to share vast amounts of sensitive data with potential buyers. 

Operational due diligence

The evaluation of the target company’s routine operations and processes necessitates data rooms as secure storage of quality control procedures, operational manuals, supply chain information, and other applicable data, providing core insights into its operational effectiveness.

Real estate deals

In real estate transactions, due diligence allows buyers and investors to thoroughly assess property value and risks. Virtual data rooms provide secure access to critical documents — property deeds, zoning permits, lease agreements, environmental reports — ensuring all parties have the information needed for informed decisions.

Best virtual data room providers

Choosing your ideal data room assumes a clear comprehension of the top VDR providers and core features to consider.

You’re now equipped to opt for your custom virtual data room provider in an organized and secure manner to best fit your business needs.

All the listed providers are reputable and secure. Your strategic task is to select the one that aligns with your project and budget.
We recommend narrowing your custom choice to four providers and leveraging their free trials.

Good luck with your decision-making, and rest assured that investing in the right VDR will pay off in smoother, safer deals.

Overall Rating: 4.8
View profile
Overall Rating: 4.8
View profile
Overall Rating: 4.7
View profile
Overall Rating: 4.5
View profile
Overall Rating: 4.5
View profile
Overall Rating: 4.5
View profile
Overall Rating: 4.5
View profile
Overall Rating: 4.4
View profile
Overall Rating: 4.4
View profile
Overall Rating: 4.4
View profile
Overall Rating: 4.4
View profile
Overall Rating: 4.2
View profile
Overall Rating: 4.2
View profile
Overall Rating: 4.2
View profile
Overall Rating: 4.1
View profile
Overall Rating: 4.1
View profile
Overall Rating: 3.2
View profile
Overall Rating: 3.0
View profile
Overall Rating: 2.8
View profile
Overall Rating: 2.0
View profile
Overall Rating: 1.5
View profile

Frequently asked question

What is a virtual data room?

How does a virtual data room work?

An electronic data room works as a repository and tool for paperwork combined with project management software features. The developers took the needs of today’s business as a basis.

Built-in data security mechanisms ensure robust file protection and user safety. Companies exchange data without the risk of hacking and breaches. Additional functions available to administrators enable workflow management and analytics.

For employees, VDRs work to complete tasks faster. It is possible through user management systems and automated processes.

How do I create a virtual data room?

To create a virtual data room, you should:

  • Find a trusted modern virtual data room. Review sites and recommendations from client companies will help you make the right choice.
  • Create groups and invite users. Administrators can manage the platform by deleting or organizing groups.
  • Establish access privileges. Allow or restrict viewing, downloading, original downloading, and editing of documents or restrict access entirely.
  • Upload files and folders to workspaces. The bulk uploading and drag-and-drop tools simplify this process.

What is in a data room?

Important data is stored in virtual workspaces. Since providers guarantee protection, law firms, life sciences, private equity companies, and other businesses have no fear in storing sensitive documents. Files and folders may contain:

  • contracts,
  • invoices,
  • tax receipts,
  • securities

These files are organized and easy to find within the data room. The online platform also supports all formats so you can upload video, audio, presentations, and others. Some developers place templates in data rooms to significantly streamline uploading and managing documents.

Users and guests should review the built-in non-disclosure and confidentiality agreement. By agreeing to its terms, the authorized users take responsibility for their actions.

What is a data room in M&A?

A data room in M&A is the repository of documents essential for merger and acquisition transactions, which involves the preparation and study of a large number of documents. From a project management perspective, a dynamic data room contributes to the deal-making without delays across many industries. Both parties get:

  • space for convenient cooperation across unlimited projects,
  • High speed of electronic document sharing,
  • Unlimited storage for all kinds of files,
  • Great usability through an all-in-one integrated solution,
  • source of sensible solutions.

The tool can make a partnership between buyer and seller possible even from a distance without risking security. To do this, the provider implements encryption, electronic signature, and dynamic watermarking. This method is cheaper than using physical storage. No travel resources are required to review the data in the cloud storage.

What is a data room for investors?

A data room for investment banking allows parties to study a large number of documents needed to make decisions before finalizing an investment transaction. In this way, they assess the risks and potential opportunities from the investments made. As a rule, the parties agree on a list of data that will become the subject of a detailed examination.

Virtual data rooms are a convenient format for investors and corporate development professionals. Regardless of the time of day, their location, devices, easy access to information is open on the platform.

What is a secure data room?

A secure virtual data room is a private virtual workspace that is safe. It is where companies can store sensitive data. To ensure security for the most sensitive documents, potential users first make sure enhanced security features are available. For example, these are encryption, access control, compliance with international standards, and others. They allow users to control sensitive documents from start to finish. The right virtual data room also applies virus scanning. This program prevents breaches and leaks.

High-quality portals are all about:

  • secure transactions,
  • secure document sharing,
  • safe collaboration with partners.

When buying a VDR, clients must not only store documents securely but also output high performance. That is why the platform should be easy to use.

How much does a virtual data room cost?

The cost of a virtual data room differs. Cost may vary depending on the contract length, feature set, availability of technical support, among other factors.

Pricing is one issue to consider before finally deciding to purchase a VDR. Sometimes organizations have to pay extra to invite more users or get gigabytes.

Most service companies offer a free trial. Users can check if this tool is appropriate for meeting their challenges.

Often the cost is changed because of the customer’s requirements. In that case, the developers customize it. Pricing also includes tariff.