business plan for data room

• Due diligence

How to choose the right data room plan for your business

Are you a startup navigating initial funding rounds? Or a large corporation managing complex transactions? Selecting an appropriate virtual data room software plan can significantly impact your deal!

Read our guide and explore the critical aspects of choosing data room plans, get valuable tips, and make an informed decision that aligns with your business needs.

• How to choose data room plan

Follow the steps below and improve your chances of selecting the ideal solution!

1. Assess business needs

Determine the specific requirements of your business, including the volume of data, security needs, and the number of users. This will help you understand the type and extent of features required in a data room and choose the appropriate plan.

✔️Top tips

• Conduct a detailed workflow analysis . Map out your business processes to understand where and how a data room will fit into your operations.
• Assess integration capabilities . Determine how well a virtual data room can integrate with your existing software, such as CRM systems, email platforms, or project management tools.
• Engage in scenario planning . Run through different scenarios of how the solution might be used in various situations, such as mergers, audits, or large-scale projects, to identify must-have functionality and potential gaps.

2. Evaluate key virtual data room features

Identify the essential features you need, such as document security, business data management, and user activity tracking. Ensure that the virtual data room provider and the plan you choose offer a full set of these features, leaving no gaps in functionality.

Key data room features to look for :

• End-to-end encryption
• Granular user permissions
• Multi-factor authentication
• Document redaction tools
• Time and IP access restrictions
• Bulk data upload and download
• Automated data indexing
• Detailed audit trails
• Advanced Q&A module
• Mobile accessibility with full functionality

👁️‍🗨️ More insights! Learn how to create a data room that brings maximum benefit.

3. Assess data room scalability and flexibility

Check whether a provider offers customizable data rooms that can grow with your business. Evaluate how easy it is to scale up or down based on your future needs and whether the platform offers flexible subscription plans.

✔️ Top tips

• Examine multi-project handling capabilities . If you anticipate managing multiple projects simultaneously, check if the software can handle a few data rooms within a single account to organize and manage various initiatives efficiently.
• Assess the platform’s performance under load . Test the platform’s performance with increased data volume and user activity. A scalable data room should maintain high performance and responsiveness even as your usage increases.
• Check for easy upgrades and downgrades . Adapting a platform to your needs should be a straightforward process with minimal disruption, ensuring you can adjust your services as your business requirements evolve.

4. Compare virtual data room pricing plans

Analyze the subscription pricing models of different data room providers. Make data room plans comparison against the features offered, and consider which plan provides the best value for your budget.

Here is a brief description of common data room pricing plans:

👁️‍🗨️ More insights! Explore virtual data room pricing in 2024 and get more tips on choosing the most beneficial plan.

5. Evaluate support and customer service

Ensure your provider offers a data room trial period, reliable and timely assistance, quick onboarding, and customer base with training resources. Unlike free or low-cost data rooms , the best virtual data rooms provide dedicated account managers and 24/7 multi-language customer support via phone, email, and live chat.

👁️‍🗨️ Questions to ask a virtual data room provider

• What are your customer support hours?
• What support channels do you offer?
• Do you provide dedicated account managers?
• How long does it typically take to resolve support tickets?
• What languages does your support team speak?
• What onboarding and training resources do you provide?
• Are there any additional fees for premium support services?

6. Read reviews

Research customer reviews and testimonials to gauge user satisfaction with specific data room plans. Reviews open valuable insights into how well different subscriptions meet the needs of businesses similar to yours.

🔊Red flags

• If multiple positive reviews use similar language or appear overly generic, they might be fake or incentivized.
• If you can’t find reviews from businesses similar to yours in size or industry, it may be a sign that companies like yours don’t widely adopt the plan.
• If a provider ignores or inadequately addresses negative reviews, it indicates a lack of commitment to customer satisfaction and responsiveness.
• If reviews highlight significantly different experiences with the same provider across various plans, it may indicate inconsistencies in service quality or plan offerings.
• Multiple reviews mentioning poor customer support or unexpected costs associated with certain plans indicate a high chance for future issues.

Ready to explore the best data rooms ? Take our quick quiz and find the perfect match for your business today!

Data room selection help

• Virtual data room plans in different business scenarios

Here are examples of how different data room plans suit various business scenarios and meet specific needs.

Before you go!

What are the risks of choosing an unsuitable pricing plan? 

Choosing the wrong virtual data room pricing plan can pose the following risks:

• Overpaying for unused features . Paying for features your business doesn’t need leads to significantly higher costs without any real benefit. Furthermore, it can divert resources from other critical business areas.
• Underestimating costs . Some plans may appear affordable at first glance. However, they often come with hidden fees for extra features, additional storage, or increased user access. These unforeseen costs can accumulate over time, leading to budget overruns and financial strain.
• Insufficient resources . Opting for an online data room plan that lacks adequate storage, user licenses, or critical features can hinder your ability to manage data effectively. As a result, your team may face delays in data processing, challenges in collaboration, and compliance issues.
• Compromised security . Cheaper plans might cut corners on secure document sharing, leaving your sensitive data vulnerable to breaches or unauthorized access. It can have severe consequences, including legal liabilities, loss of client trust, and potential financial penalties.
• Inflexibility . Some virtual data room providers and plans may lock you into long-term contracts with little flexibility to adapt to your changing needs. If your business evolves or your data requirements shift, being stuck in an inflexible plan can limit your ability to respond to new opportunities. Thus, you will continue paying for a service that no longer suits your needs.
• Key takeaways
• Different virtual data room providers offer various pricing structures, including per page, per user, per storage, and flat fees. Evaluate these models, make a virtual data room comparison, and determine value based on your budget and expected usage.
• Focus on the tools crucial for your business, such as security measures, document management features, and user activity tracking.
• Ensure virtual data room services provide robust security features, including encryption, data room access control, and compliance with industry standards.
• Compare virtual data rooms and plans to choose the solution that can scale with your business’s growth and adapt to changing needs.
• Look for a reliable, responsive customer support provider with 24/7 assistance, dedicated account management, and comprehensive training resources.

Select a plan that not only meets your current needs but also supports future growth. Ultimately, this will significantly enhance your business operations and pave the way for keeping ahead of competitors!

• What are the risks of choosing an unsuitable pricing plan?

Elisa Cline

Elisa is a marketing specialist with 15 years of experience. She worked for many VDR brands and gained insider knowledge of the industry.

At DataRooms.org, Elisa conducts marketing research, develops content plans, supervises content teams, and develops VDR review methodology. She envisions her mission as distributing accurate knowledge of virtual data rooms.

“My mission is to deliver accurate and relevant knowledge of virtual data rooms to as many people as possible.”

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How to successfully implement an app data room solution, sharefile vs dropbox: a detailed comparison, why accounting firms need virtual data rooms in 2024.

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The Insider’s Guide to Data Rooms: What to Know Before You Raise

Justine Moore

• Hacker News

It’s time for your startup to fundraise. You prepare a deck, practice your pitch, and start reaching out to investors. If a first meeting goes well, it often ends with a request to share your “data room.” But what is a data room, and what should be included in it?

What is a data room?

The term “data room” is a holdover from the 1900s, when companies used to print physical documents and present them in secure rooms for investors and other prospective partners to review. Today, data rooms are virtual — but they’re still an important part of the diligence process. 

Data rooms are also a key part of the preparation for other liquidity events like IPOs or SPACs, but here we focus on the importance of data rooms when raising venture capital. Here’s what founders need to know, including what data investors are hoping to see, the documents you don’t need, and red flags to look out for.

Data room 101

To start, a data room is a collection of documents that helps investors get up to speed on your business. The goal of a data room is to give investors the information they need to do their due diligence on your company (and eventually write an investment memo to discuss with the rest of their team). Here are the top five things we recommend including:

1. Pitch deck. This could be an entirely separate post! At a minimum, the deck should include your company’s thesis, product vision, competitive landscape, traction, and team, as well as a rough road map or plan for how you will use the funds. 

2. Cap table. This should show the current investors in your company, how much they’ve invested, and how much ownership they have. Carta has some great free templates . 

3. Historical P&L and burn. This should show the path from gross revenue through net income (loss) through cash outflow on a monthly basis. Make sure to break out different types of revenue (if applicable) and all of your major costs. It’s also helpful to add your cash balance, if you’re not including a balance sheet and cash flow statement.

4. Usage data. This data will vary based on the type of company (we’ll go into detail below on more specific metrics), but you’ll want to include data that illustrates the following:

• Growth : How is your user base scaling over time, both in terms of signups and active users? 

• Acquisition channels : Where are you acquiring users? How much does each of these channels cost you?

• Engagement :   How often are users engaging with the product? How long do they spend on it, and what are they doing?

• Retention : How are users retaining over time? This usually takes the form of monthly cohorts and looks at both number of users and spend. Depending on the natural usage frequency of the product, we may also be looking for daily or weekly retention. We’ll dive into this further below for social apps. 

5. LTV / CAC and payback period. For many consumer companies, investors are looking for the answer to a simple question: “Are you making money on the average customer, after accounting for the costs of acquiring and serving them?” This is where LTV (lifetime value)/CAC (customer acquisition cost) comes in. LTV is a measure of contribution profit generated over the customer’s lifetime. Contribution profit is different from gross margin — it incorporates other variable costs like sales and marketing that aren’t included in COGS. An LTV/CAC > 1 indicates you’ll make money on that customer, as the profit generated by the customer exceeds the cost to acquire them.

For CAC in this equation, we recommend using blended CAC — though it can also be a valuable exercise to do with paid CAC, as it gives you a sense of whether your paid marketing efforts are profitable. 

LTV is often more difficult to calculate. You’ll likely need to estimate how long a customer will retain on your product and how much they’ll spend over time. We recommend using historical data to guide these decisions, and clearly laying out your assumptions for investors to understand. 

We also look at payback period, which is a measure of how long it takes for the profit generated by the customer to “pay back” the cost of acquisition. The numerator here will be customer acquisition cost. The denominator will be a measure of profit: either gross margin, assuming you have no indirect variable costs aside from sales and marketing, or contribution margin excluding sales and marketing.

In rare cases, you may receive a cash inflow before you recognize revenue, which can shorten your payback period. The above subscription app example would look different if a customer purchased an annual plan — the upfront payment yields a payback period of <1 month.

What shouldn’t you include?

Constructing a good data room is a balancing act. You want to provide the information investors need, but you don’t want to waste your own time putting together documents or data they aren’t going to look at.

Here are five things that we often see in data rooms but wouldn’t recommend including, unless an investor specifically asks for them: 

1. Org chart and/or team bios. We definitely want to understand the background of the founding team and other executives, but we generally use LinkedIn for this.

2. Detailed 3- to 5-year financial projections. This may be a controversial one, but it’s often difficult to model forward-looking financials for early stage consumer companies. We love to hear the key milestones you’re looking to hit in the coming 12-18 months (and what you’ll need to get there), but we don’t expect a fully-baked model. 

3. Tax returns, audits, and legal docs like office leases or employee offer letters. We’re not lawyers or accountants! If we have a concern, we’ll request the documents we need.

4. Board meeting minutes. Unless we have a specific question, we’re generally not poring over these meeting minutes (and they tend to be heavily redacted anyway). However, we will usually take a look at board decks if they’re available. 

5. Market sizing. We’ll do our own work sizing the market. There are rare cases where you may want to include this (for example, if you’re in an obscure market and it’s hard to find publicly available data).

Data rooms by category

The specific metrics that investors want to see will vary based on your business model. Below, we’ve outlined the key metrics we like to see for the categories of startup we typically look at. Keep in mind that for each of these items, investors generally want to get a sense of how they’ve changed over time (if at all), not just the current state. 

Marketplaces (e.g. Airbnb, Instacart)

• Transactions, GMV, and net revenue 
• Monthly new sellers and buyers added to the platform 
• Active sellers and buyers 
• CAC on both sides of the marketplace 
• GMV retention and user retention for both buyer and seller cohorts 
• GMV concentration each month in the top buyers and sellers 

Social apps (e.g. Snap, Facebook)

• DAU, WAU, and MAU
• Daily retention cohorts – D1, D7, D30, D60, D90 retention
• Weekly retention cohorts – W1, W2, W3, W4, W6 retention 
• Acquisition split between organic and paid users on a monthly basis, and paid CAC
• Time spent and session time per user 

Subscriptions (e.g. Calm, Noom) 

• Monthly active free users and paid subscribers
• MRR and gross margin
• Conversion rates for each step in the flow: install to registration to trial to paying user
• % of users on each type of plan (e.g. monthly vs. annual) 
• Monthly retention cohorts — paid user retention (% of users still paying for a subscription at X month), and active user retention (% of users still using the app at X month) 

E-commerce (e.g. Cider, Rothy’s)

• Monthly web traffic, number of buyers, number of purchases, and transaction volume. ( There are sub-metrics that will come out of this, like conversion rate and AOV)
• Return rate
• Customer repeat rate and frequency of re-purchases
• Gross margin and contribution margin
• % of new customers by acquisition channel
• CAC, estimated LTV, and payback period

Frequently asked questions

What if my company is pre-launch?

In this case, a data room typically includes a deck, information on your team, and a roadmap for what you’d like to accomplish before the next round. If you have a beta or have done a pilot of the product, including data on that can be helpful as well. 

I never worked at an investment bank — how do I build a financial model?

That’s okay! We don’t expect founders to be Excel whizzes. Start with identifying the key drivers of value for your business. For example, that might be new users, monthly retention, and average revenue per user. Then try to project what these metrics might look like moving forward, using your historical data as a guide.

In most cases, your projections shouldn’t be vastly different from the historical data. If MAUs have grown ~20% MoM for the past six months, it’s probably unrealistic to assume 200% MoM growth for the next year. However, there are some cases where it’s reasonable to assume that your metrics will improve at scale — for example, many delivery businesses see cost per delivery fall as their network becomes denser.

On a related note, make sure that you’re fairly confident in your ability to achieve your projections. If an investor passes on your current round but wants to reconnect for later rounds, you want to be able to say that you beat or exceeded your plan.

When should I have my startup’s data room ready?

If possible, try to have your data room prepared before officially kicking off your fundraise. Putting together a data room may help you get ready to pitch investors. You’ll likely use the data in your deck, and you’ll come out of it with a better understanding of your numbers. 

Having a data room ready in advance will also keep your fundraising process moving. Consider it a work-in-progress, as you’ll likely add more as you get questions from investors. 

What are some red flags I should be aware of?

We don’t expect data rooms to be perfect, but there are a couple of things that may raise investors’ eyebrows: 

• Numbers that aren’t consistent with what’s in the deck. For example, your deck says $2M in ARR, but your model shows $1.5M.
• Numbers that aren’t consistent across tabs or spreadsheets . One way to fix this is building one comprehensive model (instead of many different spreadsheets) and linking across tabs — so if you change a metric in one place, it changes everywhere.
• Limited historical financials . For example, you only show three months of data when your company is three years old, or you show quarterly but not monthly revenue. And make sure it’s clear where historicals end and future projections begin by highlighting projections in a different color, or adding an (A) after actuals and a (P) after projections.
• Selectively presented metrics. When you present retention or engagement data, don’t cherry-pick your best cohorts of users. Include the full data — though we also like to see “bright spots” (e.g. “Users who add 5+ friends spend 20 minutes on the app every day”). 

When constructed effectively, a data room is a great opportunity to augment the story and vision behind your business with the “receipts” of what you’ve accomplished to date.

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Justine Moore is a partner on the consumer tech team at Andreessen Horowitz, where she focuses on AI companies.

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What is a data room? Data rooms for start-ups, explained

Data room definition: In the context of startup funding, a data room is a secure online platform that is used to store and share information about a startup with potential investors.

Who creates a data room? The data room is typically set up and managed by the startup, and it may contain a wide range of information that is relevant to potential investors, such as financial documents, business plans, contracts, and proprietary information.

When do you create a data room? Startups typically create a data room when they are seeking funding from venture capital firms or angel investors, as it provides a convenient and secure way for investors to review the startup's information and assess its potential as an investment opportunity.

How do you run a data room? Data rooms can be accessed through a secure login and password, and they often have robust security features such as encryption and access controls to prevent unauthorised access to the information contained within. Potential investors can review the documents and materials in the data room at their leisure and may also be able to leave comments or ask questions about specific documents.

Why do you use a data room? Using a data room can help to streamline the due diligence process and make it easier for startups to communicate with potential investors. It can also help to protect the startup's intellectual property and ensure that sensitive information is not shared with unauthorised parties.

What goes in a data room? A data room for a startup may contain a wide range of documents and materials, depending on the specific needs and goals of the startup. Some of the documents that may typically be included in a startup data room include:

Business plan : This should outline the startup's mission, target market, products or services, marketing and sales strategy, and financial projections.

Financial documents : This may include financial statements, budget and forecasting documents, and other materials related to the startup's financial performance.

Legal documents: This may include contracts, legal agreements, and other documents related to the startup's legal structure and operations.

Proprietary information : This may include intellectual property, such as patents, trademarks, or copyrights, as well as proprietary processes or technologies.

Marketing and sales materials : This may include presentations, brochures, and other materials that help to showcase the startup's products or services.

Product or service demos : This may include video footage or other materials that demonstrate how the startup's products or services work.

Customer and market research: This may include market research reports, customer surveys, and other materials related to the startup's target market and customers.

Overall, the specific documents and materials included in a startup's data room will depend on the needs and goals of the startup and the interests of potential investors.

Who offers data room software? There are several software providers that offer data room solutions specifically designed for startups. Some of the leading providers include (links are not endorsements):

• Intralinks: Intralinks is a provider of secure online collaboration and data management solutions. They offer a range of data room solutions specifically designed for startups, including the Intralinks Dealspace platform, which provides a secure and centralized location for startups to store and share information with potential investors.
• Citrix ShareFile: ShareFile is a data management platform that provides secure file sharing and collaboration capabilities. They offer a range of data room solutions for startups, including the ShareFile Data Room, which allows startups to store and share sensitive documents and information with potential investors.
• Ansarada: Ansarada is a provider of data room solutions for mergers, acquisitions, and capital raising. They offer a range of solutions for startups, including the Ansarada Data Room, which provides a secure and centralized location for startups to store and share information with potential investors.
• DiligenceVault: DiligenceVault is a provider of data room solutions for due diligence processes. They offer a range of solutions for startups, including the DiligenceVault Data Room, which allows startups to store and share sensitive documents and information with potential investors.
• Ethos Data: Ethos Data is a provider of data room solutions for mergers, acquisitions, and capital raising. They offer a range of solutions for startups, including the Ethos Data Room, which provides a secure and centralized location for startups to store and share information with potential investors.

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What is a Data Room? Types, Providers, Best Practices

by Hady ElHady | Mar 13, 2024

Data has become a valuable asset for companies across various industries in today’s digital age. As such, the need to store, manage, and share data securely has become increasingly important. That’s where data rooms come in. A data room is a secure online platform that enables users to store, manage, and share sensitive documents and information with others.

In this guide, we’ll take a closer look at what data rooms are, how they work, and the benefits they offer. We’ll also cover the different types of data rooms available, the features and functionality to look for, and how to choose the right data room provider for your needs.

What is a Data Room?

A data room, also known as a virtual data room (VDR) or an online data room, is a secure online platform that enables businesses to store, manage, and share sensitive documents and information with others. Data rooms are commonly used in high-stakes business transactions such as mergers and acquisitions, due diligence, fundraising, and other situations where sensitive information needs to be securely shared among parties.

A data room serves as a secure repository for confidential documents and information. It provides users with controlled access to documents and information, enabling them to review, collaborate, and share files in a secure environment. A data room typically includes features such as document management, user permissions and access control, security and encryption, and reporting and audit trails.

Data rooms are typically used by businesses dealing with large amounts of confidential information that must be securely shared among multiple parties. Data rooms enable these businesses to store, manage, and share information in a secure, efficient, and streamlined manner. By using a data room, companies can reduce the risk of unauthorized access, data breaches, and other security threats while also improving collaboration, communication, and productivity.

Types of Data Rooms

There are different types of data rooms available, each with its own set of benefits and limitations. Understanding the different types of data rooms is crucial when choosing the right solution for your business needs.

Virtual Data Rooms (VDRs)

Virtual data rooms, or VDRs, are online platforms that enable users to securely store, manage, and share sensitive documents and information with others. VDRs are often used in M&A transactions, due diligence, fundraising, and other high-stakes business activities. Some benefits of using VDRs include:

• Increased security: VDRs offer high levels of security and encryption to protect sensitive information from unauthorized access.
• Improved collaboration: VDRs enable multiple users to access and collaborate on documents and information from anywhere in the world.
• Streamlined processes: VDRs make it easier to manage documents and streamline operations, reducing the need for physical paperwork and manual processes.

Physical Data Rooms (PDRs)

Physical data rooms, or PDRs, are physical locations where users can access and review sensitive documents and information. PDRs are often used in legal proceedings and other situations where sensitive information needs to be reviewed in person. Some benefits of using PDRs include:

• Increased security: PDRs offer physical security measures to protect sensitive information from theft or unauthorized access.
• Enhanced privacy: PDRs provide a private and secure space for users to review sensitive documents and information.
• Improved control: PDRs give users more control over the review process, allowing them to set the terms and conditions for accessing the information.

Cloud-Based Data Rooms

Cloud-based data rooms are online platforms that enable users to securely store, manage, and share sensitive documents and information with others. Cloud-based data rooms offer many of the same benefits as VDRs, but with the added advantage of being accessible from anywhere with an internet connection. Some benefits of using cloud-based data rooms include:

• Increased accessibility: Cloud-based data rooms can be accessed from anywhere in the world with an internet connection.
• Scalability: Cloud-based data rooms can be easily scaled up or down depending on the needs of the business.
• Reduced costs: Cloud-based data rooms eliminate the need for physical infrastructure and maintenance, reducing costs.

Hybrid Data Rooms

Hybrid data rooms combine the benefits of both physical and virtual data rooms. Hybrid data rooms provide the flexibility and accessibility of virtual data rooms while offering the added security and privacy of physical data rooms. Some benefits of using hybrid data rooms include:

• Enhanced security: Hybrid data rooms offer both physical and virtual security measures to ensure that sensitive information is protected from unauthorized access.
• Improved collaboration: Hybrid data rooms enable multiple users to access and collaborate on documents and information from anywhere in the world.
• Enhanced privacy: Hybrid data rooms provide a private and secure space for users to review sensitive documents and information.

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Features and Functionality of Data Rooms

When choosing a data room solution, it’s essential to consider the features and functionality necessary for your business needs. Some key features and functionality to look for include:

• Security and Encryption: Security and encryption are among the most important features of a data room. When dealing with sensitive documents and information, it’s crucial to ensure that it is protected from unauthorized access or theft. Look for data rooms that offer robust encryption protocols, multi-factor authentication, and data backup and recovery solutions.
• User Permissions and Access Control: Another critical feature to look for is user permissions and access control. This feature allows you to control who can access specific documents and information. Look for data rooms that offer customizable user permissions, watermarks, and document expiration dates to protect your information.
• Document Management: Document management is another key feature to consider. Look for data rooms that offer easy document upload and management, version control, and search functionality to make finding and managing documents easier.
• Collaboration Tools: Collaboration tools are essential for teams working together on a project or transaction. Look for data rooms that offer collaboration tools such as comments, annotations, and live chat to facilitate communication and collaboration.
• Audit Trails and Reporting: Audit trails and reporting are critical features for compliance and accountability. Look for data rooms that offer detailed audit trails and reporting capabilities, including user activity logs, document access logs, and document download reports.
• Customization and Branding: Customization and branding are important for creating a professional and consistent image for your business. Look for data rooms that offer customization options such as logo and color scheme customization and branded emails and notifications.

Choosing a Data Room Provider

Choosing the right data room provider is crucial to ensuring your sensitive information is secure and accessible. When selecting a provider, consider the following factors.

• Security: Security should be the top priority when selecting a data room provider. Look for providers that offer strong encryption, multi-factor authentication, and other security measures to protect your information.
• Cost: Cost is another critical factor to consider when selecting a provider. Look for providers that offer transparent pricing models and flexible pricing options to fit your budget.
• Ease of Use: The data room solution should be easy to use and intuitive for all users. Look for providers offering user-friendly interfaces and training and support to help users get started.
• Reputation: Reputation is another factor to consider when selecting a data room provider. Look for providers with a proven success track record and positive customer reviews.

Implementing a Data Room

Implementing a data room requires careful planning and preparation. Here are some steps to follow when implementing a data room.

• Preparation and Planning: Define the scope and objectives of the project, identify the documents and information that need to be uploaded, and set user permissions and access controls.
• Uploading Documents and Setting Permissions: Upload the documents to the data room and set user permissions and access controls to ensure that only authorized users have access to the information.
• Inviting Users and Managing Access: Invite users to access the data room and manage their access and permissions.
• Using Collaboration Tools: Collaborate with team members using the collaboration tools available in the data room.
• Monitoring Activity and Managing Security: Monitor user activity and manage security measures to protect your sensitive information.

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Data Rooms Use Cases

Data rooms are used in various industries and situations where sensitive information needs to be securely stored, managed, and shared. Here are some everyday use cases for data rooms.

• Mergers and Acquisitions: Data rooms are often used in M&A transactions to securely store and share sensitive documents such as financial statements, legal documents, and contracts.
• Due Diligence: Data rooms are also used in due diligence processes to provide potential investors or partners access to relevant information.
• Fundraising and Capital Raising: Data rooms are used to securely store and share documents such as pitch decks, financial statements, and business plans in fundraising and capital raising activities.
• Real Estate Transactions: Data rooms are used in real estate transactions to securely store and share documents such as property deeds, contracts, and financial statements.
• Intellectual Property Management: Data rooms are used in intellectual property management to securely store and share sensitive documents such as patents, trademarks, and copyrights.
• Legal Proceedings: Data rooms are used in legal proceedings to provide parties with access to relevant documents and information in a secure and organized manner.

Best Practices for Using Data Rooms

To ensure that your sensitive information is protected and accessible, it’s important to follow best practices when using data rooms. Here are some best practices to consider.

• Security and Confidentiality: Ensure your data room is secure and confidential using strong passwords, encryption, and access controls. Limit access to sensitive information to only authorized users, and implement multi-factor authentication for added security.
• Document Organization and Management: Organize and manage your documents in a logical and structured manner. Use version control and naming conventions to make it easier to find and manage documents.
• User Management and Access Control: Manage user access and permissions carefully. Ensure that users only have access to the necessary documents and information, and revoke access when it is no longer required.
• Communication and Collaboration: Use the collaboration tools available in the data room to facilitate communication and collaboration among team members. Encourage team members to communicate and collaborate within the data room to ensure all communication is recorded and easily accessible.
• Monitoring and Reporting: Monitor user activity and generate reports to ensure your data room is used appropriately. Use audit trails and reporting tools to track user activity and identify potential security issues.

In today’s digital age, data rooms have become essential for securely storing, managing, and sharing sensitive information. Whether you are involved in M&A transactions, due diligence, fundraising, or other high-stakes business activities, a data room can provide the security and functionality you need to get the job done.

By understanding the different types of data rooms available, the features and functionality to look for, and the best practices for using them, you can select the right solution for your business needs and ensure your sensitive information is protected and accessible.

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What is a data room?

When do you need a data room.

• Mergers and acquisitions (M&A)

Initial public offerings (IPOs)

Fundraising, legal transactions, data room best practices, access management, intuitive organization, periodic reviews, user education, use watermarks, creating a data room for investors: what to include.

In the past, businesses used physical data rooms with filing cabinets to keep their information safe. Today, a virtual data room (VDR) or “deal room” is a secure digital place to share your company’s sensitive documents and confidential information. Learn why every startup needs a virtual data room—and how to implement one for your company.

Data rooms are the backbone of confidential document exchange and due diligence (a process investors like venture capitalists use to investigate a startup’s operations and financials to see whether the investment is viable). Some due diligence processes take a couple of weeks, while others take months. 

During due diligence, a data room becomes your company’s trusted ally. An organized data room streamlines the process and enhances transparency, which can tip the scales in favor of a successful deal. Data room use cases include any activities that involve the exchange of confidential data, such as fundraising , mergers, acquisitions, and other legal transactions.

Mergers and acquisitions (M&A)

During an M&A transaction , a data room centralizes documents, expediting review and allowing both the buyer to focus on the strategic aspects of the deal and evaluate the target company's value, risks, and synergy opportunities efficiently.

Companies considering an IPO typically spend several months preparing for the rigors of being a public company. Setting up a virtual data room helps the company go through the due diligence process with underwriters during the IPO process and facilitates fast and effective investor communication , helping save time and money. This transparency and accessibility are pivotal in facilitating a smooth and well-informed IPO process, instilling confidence in investors and regulatory bodies alike.

→ For a deep dive on IPOs, read our IPO Readiness Guide .

Want to download a free IPO readiness checklist to maximize your chances of a successful public offering?

Download your free IPO Readiness Checklist here:

When you’re trying to raise capital , investors want to see your company’s costs, estimated runway, and funding needs. Having all of that information organized in your data room, along with a pitch deck , can speed the process along and increase investor confidence. For instance, a technology startup seeking funding can upload confidential revenue projections, IP ownership documentation, and detailed financial records into the data room, which potential investors can access with appropriate permissions. This enables investors to conduct thorough due diligence, evaluate the company's growth prospects, and make informed investment decisions.

The truth is that any type of business transaction demands meticulous documentation and confidentiality. A data room simplifies the exchange of legal information, enabling authorized parties to access documents securely. This fortified digital environment not only ensures a smooth legal process but also simplifies intricate procedures.

Here are some best practices in data room implementation. By taking these steps, you can properly secure the integrity of your company’s sensitive information, optimize the outcomes of critical transactions, and build trust with potential investors and partners. 

Not all parties need access to every document. Use permissions to control what information specific team members can see. For instance, an HR professional might not need to see the same detailed financial records as a CFO.

To create an easily navigable data room, establish a hierarchical folder structure with main categories, subfolders, and standardized document names. Include a master index for guidance and maintain clear access permissions. Regularly update the structure to accommodate changing needs and ensure documents are easily accessible and intuitively organized.

Regularly review your data room’s activity log to maintain security and monitor usage. We also recommend keeping your data room up-to-date periodically or following any material event. Old financial statements or outdated contracts can mislead potential investors or partners.

User education for a data room is essential. Start by providing clear instructions on how to access, navigate, and search for information within the data room. Educate users on data security and access permissions, highlighting the importance of confidentiality and the consequences of mishandling data. Provide user-friendly training materials and sessions to facilitate familiarization.

For ultra-sensitive documents, consider using watermarks to decrease the risk of theft or document alteration. Watermarks also discourage unauthorized file sharing or information leaks.

In a data room designed for investors, you should include critical financial, legal, and operational documents that provide a comprehensive view of the company's performance and potential risks.

Consider including the following in your data room:

Financial statements (e.g., balance sheets, income statements, cash flow statements)

Business plans

Market analysis

Legal contracts (e.g., partnerships, leases, and loans),

Corporate governance documents

And any other information requested in the investor’s due diligence request list or relevant to the investment decision.

Carta Launch customers and fund admins can create their own data room for free. Learn more or get started for free below.

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Data Rooms for Startups: Secure Document Management and Efficient Fundraising

Companies in the startup phase need a secure place to share data with potential investors. Learn what is a startup data room, why this powerful solution is so beneficial and the most common use cases.

Understanding Data Rooms for Startups

A data room is a centralized place where all information related to a deal or a company can be stored. Because the data room is virtual, employees and investors can access information at any time. This makes it easy to securely store and share documents with potential investors, for instance, during a road show leading up to an IPO.

Ready to learn how data room for startups relieve a lot of the pain points of organizing information, protecting intellectual property and helping a startup attract investors and raise the necessary capital to grow? Read on to learn exactly how data rooms benefit startups.

Key Benefits of Data Rooms for Startups

A virtual data room for startups offers several important benefits, including:

Enhanced Security:  Virtual data room features  such as encryption and access control protect sensitive startup information, including intellectual property, confidential business plans and finances.

Efficient Fundraising:  Data room features support  investor relations  by streamlining information sharing with potential investors.

Better Collaboration:  Data rooms help not only startups but assist with many other types of  corporate transactions , for instance, by allowing parties to collaborate on raising capital or completing a deal.

Regulatory Compliance:  Startups need to comply with industry-specific regulations but may not have the legal grounding in regulations and compliance to know how to go about this. A startup virtual data room makes compliance easier due to its built-in reporting, analytics, contract analysis and data management features.

Scalability:  Because data rooms are scalable, startups can scale their document management as their business grows in a cost-effective manner.

Key Applications of Data Rooms for Startups

Now that you know the chief  benefits of virtual data rooms , let's see how startups use these tools to grow:

Fundraising:  With a virtual data room or VDR private equity and fundraising become easier. The data room provides a confidential place for potential investors to browse financial statements and review pitch decks and business plans, so they can determine their investment allocation.

Due Diligence:  The due diligence process is streamlined when a startup can use a VDR to organize and share documents related to their fundraising and business operations. Learn more about the  due diligence data room  relationship and the key features of a VDR as they pertain to the startup world.

Partnerships and M&A:  As hinted at earlier, data rooms support startup growth during business transactions from an IPO or SPAC/de-SPAC to an M&A deal.

Legal and Compliance:  Data room features support legal and compliance measures a startup must comply with.

Challenges and Considerations

The data room startup fundraising relationship is not without its challenges and considerations.

Cost vs. Benefit:  When seeking private equity data room costs must be weighed against benefits. Many startups operate on a lean mentality, putting as much capital back in the business as possible. Always price out the cost of a virtual data room provider, including the options to scale as you grow. This ensures your company can maximize benefits while keeping costs under control.

User Adoption:  A VDR is only as successful as its users make it, thus it is important to equip stakeholders with the necessary training and tools to manage the data room.

Integration with Existing Tools:  Before signing a contract, it is critical to ensure that a particular VDR will integrate with the rest of your tech stack.

Now that you understand the need for a virtual data room, explore best-in-class solutions from DFIN, the  virtual data room provider  trusted by successful startups and established businesses.

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What to Include in a Data Room for Investors: Essential Guide for Startups

Creating a comprehensive data room for investors is crucial for startups aiming to secure funding efficiently. A well-organized data room not only streamlines the fundraising process but also impresses potential investors by providing easy access to essential documents and financial metrics, which they will ask to see.

Andrea Funsten is an investor at Basecamp Fund so it is safe to say she has seen her fair share of startups. An easy way to impress Andrea and get her to move forward with the deal quickly? A data room.

As Andrea Tweeted , “Even as early as the seed stage, an organized data room can make you stand out from the crowd. Sharing a list below of items that I received this week from a founder who is ~2 months away from raising. Left me so impressed and eager to move fast on the deal.”

Related Resource: You can now build and share your data room with Visible. Give it a free try here .

This guide will explore what should be included in a startup data room, why having an investor data room is beneficial, and how to set up an effective data room for your fundraising needs. Whether preparing for your first round of funding or looking to improve your existing data room, this article will provide valuable insights and best practices to help you stand out to investors.

What is a Data Room?

A data room is a secure online repository used by startups and businesses to store, manage, and share critical documents with potential investors, partners, and stakeholders. This virtual space enables startups to present vital information in an organized and accessible manner, ensuring that investors have all the necessary data to make informed decisions.

The primary purpose of a data room is to facilitate the due diligence process during fundraising. By having a well-structured data room, startups can efficiently provide investors with access to financial records, legal documents, market research, and other essential materials. This not only speeds up the fundraising process but also demonstrates the startup's professionalism and preparedness.

A data room is particularly beneficial for startups as it allows them to control the flow of information, maintain confidentiality, and track investor engagement. With all important documents centralized in one secure location, startups can easily manage updates and ensure that investors always have access to the most current data. In summary, a data room is an indispensable tool for any startup looking to streamline their fundraising efforts and build trust with potential investors.

Why Startups Need a Data Room

A startup data room is invaluable for any company seeking to raise capital and attract investors. By organizing and centralizing all critical documents, a startup data room streamlines the fundraising process, builds investor confidence, and enhances overall efficiency. Here are some additional reasons why a startup data room is essential:

Facilitating Due Diligence

• Efficient Information Sharing: During the due diligence process, investors will request various documents to assess the startup's viability. A startup data room allows you to quickly fulfill these requests by providing easy access to financial records, legal documents, market research, and other essential materials. This efficiency helps maintain momentum in the fundraising process and keeps potential investors engaged.
• Reducing Redundancy: Instead of responding to individual document requests, you can direct all potential investors to your startup data room. This reduces redundancy and ensures that all parties are working with the same information. It also minimizes the risk of errors or discrepancies in the shared data.

Enhancing Professionalism and Preparedness

• Demonstrating Organization: A well-organized data room demonstrates to investors that your startup is professional and prepared. It shows that you have taken the time to compile and organize your documents, which can instill confidence in your business operations and management team.
• Creating a Positive Impression: Investors are more likely to trust and invest in startups that can efficiently provide comprehensive and accurate information. A data room that is easy to navigate and contains all necessary documents creates a positive impression and sets your startup apart from competitors.

Ensuring Information Security

• Controlled Access: A startup data room offers robust security features to protect sensitive information. By using a secure online platform, such as Visible, startups can control who has access to their documents and track investor engagement. This ensures that confidential information is only shared with authorized parties, maintaining the integrity and confidentiality of your data.
• Monitoring Investor Engagement:  Visible provides analytics that lets you see which documents are being viewed in your data room and by whom. This information can be invaluable in understanding investor interest and identifying which aspects of your business attract the most attention.

Supporting Long-Term Growth

• Scalability: As your startup grows, your data room can evolve to accommodate new documents and information. This scalability ensures that the data room remains relevant and useful throughout different stages of fundraising and business development. Whether you are raising a seed round or a Series B, your data room can adapt to your changing needs.
• Flexibility: A startup data room can be customized to fit the specific needs of your business and investors. You can add or remove documents as necessary, ensuring that your data room always contains the most relevant and up-to-date information. This flexibility allows you to respond to investor feedback and tailor your data room to different fundraising scenarios.

Benefits of an Investor Data Room

Building momentum in a fundraise, especially at the early stages, can almost feel impossible. Having your documents and assets in one place is a surefire way to speed up the process as much as possible. Unfortunately for founders, different investors will want to see different documents throughout a fundraise. In order to best prepare for one-off requests, it is vital to have all of your materials in 1 place to speed things up.

• One central spot where all of your most important documents live
• A forcing function to prepare the required materials before a fundraise
• Easily share documents with investors
• Track how specific investors are engaging with your fundraising materials.

A few more detailed benefits of a data rooms include:

• Streamlined Fundraising Process: A startup data room centralizes all necessary documents in one secure location, making it easy to share information with potential investors. This reduces the back-and-forth communication typically required during due diligence, speeding up the fundraising process and allowing startups to focus on their core business activities.
• Enhanced Investor Confidence: Having a well-organized startup data room demonstrates professionalism and preparedness. Investors are more likely to trust and invest in startups that can efficiently provide comprehensive and accurate information. This transparency can set a startup apart from competitors and create a positive impression.
• Improved Information Security: A startup data room offers robust security features to protect sensitive information. By using a secure online platform, startups can control who has access to their documents and track investor engagement. This ensures that confidential information is only shared with authorized parties.
• Efficient Due Diligence: During the due diligence process, investors often request various documents to assess the startup's viability. A startup data room can quickly fulfill these requests by providing easy access to financial records, legal documents, and other essential materials. This efficiency can help maintain momentum in the fundraising process.
• Centralized Document Management: Startups often need to update their documents as new information becomes available. A startup data room allows for easy document management and ensures that all stakeholders have access to the most current data. This reduces the risk of sharing outdated or incorrect information.
• Scalability and Flexibility: As a startup grows, its data room can evolve to accommodate new documents and information. This scalability ensures that the data room remains relevant and useful throughout different stages of fundraising and business development.

Should I Have an Investor Data Room?

Before putting together your investor data room you need to ask yourself, “Should I have a data room?” The idea of data rooms is widely debated between VCs and founders. As seen above, access to a data room allowed Andrea to move quickly on her deal. On the flip side, Mark Suster claims that “ you should never have a data room .” Why?

Mark makes the case that a data room actually slows down the process. After meeting with an investor for the first time they may ask for a data room, hem and haw over the details, and delay giving a solid yes or no for as long as possible.

However, there are clear advantages to using an investor data room. If done correctly, a data room can field most questions and due diligence that investors will have. In a world that continues to move away from in-person events, the ability to control the story of your data and startup is vital. The scale at which you can contact and answer questions from potential investors will allow you to focus on other aspects of your business — not just fundraising.

If you have a line of investors out the door eager to write a check — sure, you can probably skip the data room. If you’re like the 99% of companies speaking to countless investors and pressing to close your round, you may benefit from a structured and scalable way to share your data. Learn more about why you should have a data room from Elizabeth Yin of Hustle Fund below:

If you have decided a data room is right for your company, the question now becomes “How and what should be in my investor data room?”

What Should Be in My Investor Data Room?

Deciding what to include in your investor data room can be intimidating. You don’t want to include too much or too little. Remember the goal is to be more efficient to speed up your fundraise. However, most investors will be looking for similar things in a data room.

It is important to share what feels right to you — some blanket tips/best practices:

• Do not over-share information
• Share the most up-to-date information
• Well-organized and easy to navigate

Every business is different. These are simply suggestions for what founders can include in a data room. For example, a Series A company might have more robust financials and documents to include compared to a pre-revenue company. Check out a few suggestions for what to include in a data room below (we recommend each major section being a main folder with sub-folders underneath).

Overview Folder & Documents

As we mentioned above, organization is crucial for a successful data room. Having an overview folder with key information is a great way to set the tone. You can include a cover letter to help lay out the data room, your most recent pitch deck, and term sheet.

Related Resource: How to Write a Cover Letter for Your Data Room

Financials & Cap Table

To start, you will want to include the basics for your fundraise. This includes your deck, basic financials (cash metrics, OpEx, etc.), projections for the following year, and your cap table. Be sure to include any happenings and commitments for the current round as well. All of these things should be easily accessible for you and should require minimal effort to get them together.

The team at Corl suggests including the following documents as well:

• Voting agreements
• Investor rights agreements
• First refusal & co-sale agreements
• Stock purchase agreements
• Capitalization table
• Any documents/details on previous raises

Related Resource: The Startup Metrics Potential Investors Want to See

Market Data & Research

This section is intended to show you have a deep understanding of your market and your immediate competitors. Include any first-hand market research or public reports that are relevant to your market. You will also want to share a competitive analysis showcasing different price points and feature differences.

As Andrea Funsten wrote, “include a competitive Landscape Tracking Sheet – a list of companies that they are tracking, some that are not on the market yet. I love that they were not afraid to share this and were extremely thorough.”

Incorporation Docs

Investors will want to quickly glance at incorporation docs to make sure your company is set up for success. A couple of example docs that are worth including

• Amended and restated articles of incorporation.
• Business certificates

Team & Stakeholders

This is exactly what is sounds like, a section to highlight your team members. This should also show the exact titles, salaries, and job description for current team members.

Also use this as a section to showcase where your next hires will be. This will not only help share the vision of the team you are building but can also allow investors to jump in and help hire from their network. To go above and beyond, you can also include things like onboarding documents to offer a glimpse of your culture and hiring process. A couple of example ideas:

• Employee contracts
• Team overview
• Onboarding documents
• Info on current board members
• Past board decks

Related resource: The Startup’s Guide to Investor Agreements: Building Blocks of VC Funding

Past investor Updates

Not only will including past investor updates help them assess the growth of the business, it is a surefire way to show you take investor communication and transparency seriously. As Andrea Funsten Tweeted, “Recent investor updates for the last 6 months. Helps me not just gauge the level of transparency that they have with their investors (sharing the bad just as much as the good) but I can see the progression over time.”

Customer References

During due diligence, investors will likely want to understand how your customers view your company. You can include a customer references and referrals section in your data room to help demonstrate how much your customers love your company.

Marketing materials

This can be a quick section showcasing your brand and marketing vision. Include your pitch deck as well as a deck you may share with customers. The team at Corl suggests sharing a 1-pager on your brand and marketing vision here as well.

Related Resource: Are Your Marketing Efforts Really Enabling Sales Performance?

Some companies might want to include a section about their product or service. This can include anything from a demo video to IP information and patents. Check out a few examples of what you might want to include with your product folder below:

• IP information
• Technology (APIs, integrations, roadmaps, etc.)

These are the basics to get you started with your data room. While different investors may want to see different things, these should give you a solid start. You may be asked to include things like intellectual property, technology stacks, and more company documentation.

Related resource: Investor Agreement Template for Startup Founders

What Shouldn’t Be Included in My Investor Data Room

As a founder it is important to control your story during a fundraise. To help with this it is important to make sure what your investors are seeing and engaging with throughout a fundraise. Certain data or documents without context can be dangerous to a raise so it is important to keep tabs on what is in your data room. A few things that might not be worth including in an investor data room:

• Documents that aren’t vital to investors for decision making
• Sensitive information or data that might require additional context
• Documents that are not important to the stage an investor is at in the journey – for example, if they are only taking a coffee meeting, limit what you are sharing with them.

Build Your Data Room With Visible

At Visible, we oftentimes compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors.

With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible.

• Find investors at the top of your funnel with our free investor database,  Visible Connect
• Track your conversations and move them through your funnel with our  Fundraising CRM
• Share your  pitch deck  and  monthly updates  with potential investors
• Organize and share your most vital fundraising documents with data rooms

Beyond DocSend: Exploring Innovative Document Sharing Platforms for Modern Teams

Manage your fundraise from start to finish with Visible.  Give it a free try for 14 days here.

We’re often asked what a data room is, how it is used and its main features and advantages. In this article, we’ll take an in-depth look at:  

• What a data room means and how they are used 
• What goes in a data room
• Their features and benefits 
• Why data rooms are more secure than standard cloud storage services 
• How to set up a data room 
• How data rooms are evolving and able to support more than just due diligence

What is a data room ?  

A virtual data room, often just referred to as a data room, is an online repository for important or sensitive business information. In simple terms, it’s a secure storage facility and the modern equivalent of a physical room where hard copies of documents would be stored for review during buying or selling negotiations.  

Today’s virtual data rooms perform the same function, but documents no longer have to be printed and physically stored, saving time, resources and space. With encryption technology and advanced security features too, virtual data rooms are also significantly more secure and accessible.  

A virtual data room is a secure online repository for storing and sharing information

What are data rooms used for?

Most people think of a data room being used for the due diligence process of a merger or acquisition deal. Both sides of a potential deal can access the data room with sellers able to manage user permissions on the buyer side. This means sensitive information such as financial performance, patents and product development is shared and seen in a controlled manner. Of course, this is particularly important if the deal is abandoned by either party during negotiations, helping to limit the number of people with access to privileged information.  

However, today’s data rooms are not just used for due diligence. Technical development and the trend for remote working means they are increasingly used to support the full lifecycle of a potential deal, as well as divestitures, fundraising and business restructuring. They are also popular as a method of internally storing and sharing corporate documents in a way that is more secure than email.  

Typically data rooms are used for the due diligence process of a financial or legal deal between two or more parties. Increasingly however, they are being used for the full lifecycle of a deal as well as fundraising or restructuring.

The data room market is growing  

As data room features evolve, their usefulness to a wider range of business types and sizes is apparent. Already popular with large corporate or multinational companies, start-ups and SMEs who may have remote or hybrid working teams, are finding them increasingly indispensable too.  

According to research specialists Allied Market Research1, the data room market is expected to reach a global value of $3.63 billion by 2026, which would represent a compound growth rate of just under 14% since 2019.  

Within Europe, another research firm, Business Market Insights, believes it could increase from $388 million in 2021 to $934 million by 2028, representing a compound growth of 11.6% in the 7-year period,2  while others believe there is potential for growth up to 14% or more. 3 

The European virtual data room market is expected to grow by up to 14% by 2028.

In their report commentary, Allied Market Research highlights the prevalence of data room  usage in the IT, banking, financial and insurance sectors, but also predicts a growing adoption among SMEs. They argue that while banking and financial organisations largely use data rooms to help minimise the risk of cyber-attacks on customer data, they believe IT and telecom companies will increase their use “owing to its unique features of storing and delivering accurate information to end-users for improving their decision-making capability”. 3  

Data rooms in practice - their purpose and benefits  

Typically data rooms are used for managing the complex and sometimes lengthy process of due diligence. This is often during a merger or acquisition (M&A) negotiation, with the two sides reviewing business-critical documentation that may result in a future deal.  

However, data room due diligence can also be about more than just M&As. It is also needed for equity and fundraising purposes or even bankruptcy proceedings. In practice, data room due diligence is important when planning or reviewing any business transaction that may financially or reputationally impact both sides of that transaction.  

As a result, the job functions using the data room can vary widely. Senior management and c-suite executives, corporate or company secretaries, compliance officers, financial analysts and legal teams are some of the most frequent users. Business owners and founders, especially of start-ups and SMEs across a broad range of sectors, are now being added to that list too. 

What goes in a data room ?

Perhaps one of the most frequently asked questions is, what goes in a data room ? The answer is not a straightforward one because, quite simply, it can be anything and everything pertaining to a deal or other project. However, here are examples of the most typical documents uploaded to a data room for due diligence:  

• Financial statements including profit and loss, audited accounts and forward projections 
• Shareholder details and information 
• Partnership agreements and customer contracts 
• Competitor analysis and position in the marketplace  
• Patent and trademark information, including past or current disputes 
• Past and present legal agreements or disputes 
• Board meeting minutes 
• Staff structure, contracts and remuneration 
• Business plan and marketing and sales plans 
• Technical systems, software and assets 

While we’ve included some of the most common documents here, needs will vary by type of transaction and company. For financial or legal due diligence, we recommend using a checklist, like this one , as it’s a good starting point for gathering requirements.  

What are the benefits of a data room?

Data rooms can save you time and resources, make collaboration and communication more timely, and of course offer peace of mind from a security perspective. Here are some of the key benefits for organisations and users.  

With the rise in hybrid and remote working, board teams and senior management can rely on the technology behind a virtual data room to keep sensitive documents and information secure, such as:

• The encryption technology used in a data room is superior to that of normal cloud storage, which is why they are frequently used by financial institutions to protect customer data that is at higher risk of cyber-attack
• User permissions can be tailored by data room administrators, so access to specific documents can be restricted where necessary
• Contents of the data room are automatically backed up ensuring companies never lose confidential information
• Login access to the data room is strictly controlled by the latest authentication methods

The more quantifiable benefits of a data room are cost and time savings. Reducing resources and time spent by staff finding, sharing and communicating information frees up their time and corporate budgets to be spent more efficiently in other ways.

• The sheer volume of documents stored in a data room means uploading them electronically is much quicker than printing out large quantities of hard-copies
• Administration of the data room relies on a user-friendly dashboard designed specifically for the needs of due diligence or transaction management, saving admin time on processes
• Data rooms help companies reduce costly resources from both a financial and environmental perspective such as printing, paper and ink etc, plus they no longer require physical space for document storage
• Data rooms are an efficient way to collaborate with internal and external stakeholders, reducing time spent on emails, online meetings and phone calls

With the rise in hybrid and remote working, having instant access to documentation is critical. A virtual data room means scattered teams, across countries, regions and even time zones can still access every document, whenever it's needed. 

• Enhanced security measures within the data room mean wherever the information is being accessed, it is still done so in a secure and controlled manner
• Advisers and stakeholders that you involve in the due diligence process can also access your data room in a secure manner. This is especially useful for legal or investment advisers who offer expertise in deal negotiations but are external to your team

A data room can take care of so many administrative and supporting processes. They free up time to focus on the stuff that matters most - such as the deal, or project itself. 

• A data room makes uploading and sharing documents quick and simple and always from within the same environment, saving time going between different applications
• It’s easy to set and control access to documents by user, so less time can be spent managing who sees what
• Collaboration between internal teams is easier as everything is in one place. Features such as Q&A modules and secure encrypted messaging are used within the same application, making communication seamless, secure and efficient 

The benefits of a virtual data room include enhanced security, process efficiencies, and time and resource savings. They can also be securely accessed from any location and any device.

How secure is a data room?

When we talk about a secure data room we are referring to the enhanced security measures that underpin it. Technical developments have resulted in the most effective methods of safeguarding its contents against malicious cyberattacks or even just the more common human error. A leak of information can be at best frustrating and time-consuming to rectify, but at worst a deal-breaker or one that requires serious damage limitation.

Since a secure data room utilises enhanced security measures, data and documents are encrypted before they are stored, and login history and user permissions are controlled and accessible at all times. Most data rooms also use two-factor authentication (2FA) as an extra layer of security and are compliant with specific security certifications, such as:

• ISO 27001:2013 certification - an international standard for managing security and safeguarding information security and reducing the risk of data breaches
• SOC 2 certification - a series of controls that ensure the integrity of information availability and processing, including the privacy of that information
• GDPR compliance - a data room owner will become a data controller and processor under GDPR legislation, so it is vital the data room solution adheres to data protection and privacy requirements 

What’s the difference between cloud storage and a data room?

Often, clients ask us if they really need a data room. Quite understandably, they wonder if they can just use a cloud storage solution like Google or OneDrive, or maybe a file-sharing service like Dropbox. 

While data rooms are built on the principles and systems of cloud storage, and therefore share a similar approach to document availability (on any device and in any location), their main differentiating factor is far greater security protection. 

In a data room, information and documents are encrypted as they are moved to the cloud, when being shared and during storage in the data room. 

In personal file sharing or storage solutions such as Dropbox and Google Drive, data is only encrypted during the uploading process itself. As most of the documents involved in due diligence are of a highly sensitive nature, we believe the additional encryption of a secure data room is vital. 

A data room offers the same level of encryption technology as banks and financial institutions, ensuring data is encrypted during file sharing and storage. When choosing a data room solution, look for relevant certifications such as ISO 27001:2013 and SOC 2

How to choose the right data room for your needs

Choosing a data room is an important decision - you’ll need to decide on storage capacity, check it has the right features but also easily accessible technical and product support. 

Let’s first look at how big a data room has to be. As you might expect, this will depend on the volume of documents and data you wish to upload and store. For example, text documents will take up less capacity than high-res images or technical drawings. However, if you are a small or medium-sized business and are expecting a due diligence process to be fairly straightforward in its complexity and duration, then we’d suggest a solution that offers between 500 and 1000MB of data storage. 

If you are working on a larger project or deal, then perhaps look at a package that offers around 1500MB of storage. Other factors in deciding how big a data room has to be include:

• The number of users needing to access the data room
• How easily you can upgrade if you need additional storage capacity in the future
• How many deals or due diligence processes you anticipate over a given period of time

Essential data room features 

Naturally data rooms vary in size and functionality but there are some core features that you’ll always need for a successful due diligence process. Since data rooms are not only used for M&As, you’ll soon discover that most of these features offer additional benefits to you and your team too. 

Alongside encryption of documents and data, your data room should also offer internal team messaging within the application. A secure messaging tool offers a much higher level of encryption security protection to share confidential documents compared to using email. It reduces the risk of data leaks and saves users time since they don’t have to bounce from one application to another. 

Assigning reading and uploading tasks for both internal and external users usually falls to the data room administrator. A good task management tool within the data room will provide a 360° view of every task, who it is assigned to and it's status. This makes following up on tasks and deadlines more efficient. 

While secure messaging is used for internal communication, as soon as your data room is opened up to a third party, a Q&A tool will facilitate discussion and manage the Q&A process between the two parties.

For example, during due diligence for a potential M&A deal, questions will be posed by the buyer-side based on the contents of your folder structure and its documents. The task of answering those questions can be assigned to the seller-side team by the data room administrator. For total confidentiality, there will be a different Q&A module for each potential buyer team so there is no risk of confusion. A good Q&A tool provides structure and organisation to an essential and often protracted part of the due diligence process. 

Manually removing sensitive information from a document can be time-consuming and will increase the likelihood of single or multiple instances being missed. This could have a serious impact on the deal outcome. 

A redaction tool enables data room users to reliably and selectively block out information in any document. This can be done by scrolling to each instance or by using the keyword search function to find and redact multiple instances in the document in one go.

Adding personal notes to a document stored in the data room can be a great way to gather thoughts and questions for the other side. We’d also argue that the best annotation tools allow you to make notes on any document that are only viewable by you - so even if a colleague or a member of the third party team is viewing the same document, they won’t see your notes. 

Controlling access to the data room and its contents is vital, whether it is being used for due diligence, internal file sharing and storage or fundraising purposes. Granular access permissions that can be customised based on role, document and folder level, or activity within the data room, are essential. 

Keeping track of tasks, Q&A threads, document uploads and deadlines is much easier if your data room sends email notifications to users that have assigned tasks. These should be customisable by the user in terms of frequency via the data room dashboard. 

Making sure you have enough data storage, but that you can also easily change your package or subscription with minimal fuss, are important for continuity and peace of mind. As needs change and evolve, your data room will need to adapt too, so look for a provider that builds flexibility into their subscription packages. 

Many data rooms now include integration with machine learning or artificial intelligence (AI) tools. AI can be invaluable in reducing time spent on manual tasks such as reviewing long or multiple documents while searching for potential discussion points or deal-breakers. AI tools can do much of this for you, surfacing any ‘red flags’ quickly and systematically, and reducing the amount of information a human being has to read. 

For data room administrators, understanding who is doing what and by when is vital to keeping the potential deal or project on course. Good data room solutions include a suite of reports detailing user activity, from what documents have been viewed to which have been downloaded or printed. This is especially relevant once the data room is opened up to a third party and helps ensure confidential information continues to be safeguarded appropriately. 

Ongoing technical and account management support is vital to getting the most from your data room. With regionally scattered teams who may work across different time zones, support that is available 24 hours a day 365 days a year is another important factor to consider. 

Comparing features when choosing a data room provider is crucial to finding the right solution for your needs. Features such as a Q&A module, task management tool, customisable user permissions and secure messaging are among the most important to evaluate.

How to set up a data room

Once you’ve chosen your data room provider and decided on storage capacity, it’s time to look at how to set up a data room. Initially, you may want to consider using a preparation data room, which is a data room that is set up for internal use only. Once you’re ready to invite a third party, it becomes a full data room - there’s more on preparation data rooms below, but first, let’s look at the main set-up process. 

How you set up a data room at the start is important in getting the most from it. Creating your folder structure is usually the first task and most data room solutions will help by automating the process. This provides a template structure that you can adjust and refine based on your exact needs. Some data rooms also provide templates depending on the type of project or due diligence you are working on - for example, fundraising, legal or financial due diligence, which you can tweak to your preferences. 

Once you’ve decided how to build your data room’s folder structure, there’s 4 more steps to finalise the process:

• Index your folder structure - a data room index is just like the contents of a book, it lists each folder and its contents helping you to keep everything organised. A good data room index also helps users navigate the data room to easily find the documents they need
• Next, continue to build the data room by uploading documents into the folder structure
• Assign user access permissions for internal teams - decide on who should have admin privileges, if specific users should have restricted access to certain folders or documents, and what access a potential buyer or third party needs
• Assign document upload and reading tasks to your team and advisers, and once you’re ready to invite them in, third-party personnel too. 

What is a preparation data room?

A preparation data room or portal is a term used to describe a data room during the set-up period and before third parties are invited to join. It helps an organisation get ready for the main due diligence process, uploading documents and information in a systematic way without being under the pressure of task-related deadlines. 

We are often asked how early should a data room be opened or due diligence started and our 

answer is always the same - it’s never too early! Getting everything prepared and documentation uploaded early means once a third party is invited into the data room, you feel equipped to manage the process and their questions more efficiently. 

Many organisations now use a data room on an ongoing basis too, relying on its enhanced security measures for safe file sharing amongst teams and as a method of secure storage for confidential records. It can also be extremely useful as a project management tool or if an organisation is preparing to attract investors. A preparation data room will help keep these types of projects on track, creating process efficiencies along the way. 

Inviting third parties to the data room

Once a data room has been set up, the folder structure created and files and documents added, the buy-side or other third parties can be invited to access the data room. They will see the same dashboard but with access to specific folders and documents controlled by an administrator.

Therefore, data continues to be protected according to the user permissions that have been set. They can also use Q&A modules to ask questions of the other side forming the main process of data room due diligence and helping to keep deal negotiations moving forward.

Closing a data room 

Deal-making can be a lengthy process that reviews hundreds of documents with many questions and answers going back and forth between parties. Inevitably the data room contains a lot of confidential information and once the deal is struck, or the project is finished, it is important to know how to retrieve that information from the data room. 

Exporting files from the data room should be straightforward and allow an administrator to extract the information in an encrypted format such as a ZIP file. Once the data has been zipped and downloaded to a computer, we recommend it is stored as an archive that can easily be uploaded again into a data room once another due diligence process begins. 

Data rooms are evolving 

As an organisation's needs change, data rooms will need to adapt and offer new ways to support processes and efficiency. 

The growth of AI tools and integrations is certainly driving innovation in virtual data room technology and we expect this to continue. Despite our modern need for faster delivery and shorter deadlines, due diligence hasn’t really changed in that it still takes a long time to properly review and discuss every aspect of a company’s operations. And quite rightly so, since generally speaking the stakes are pretty high. However, an AI tool within a data room can remove manual tasks from highly qualified people, such as lawyers, and free up their time to be better spent on more strategic or advisory issues. 

We also predict that using a virtual data room for more than just due diligence will continue. The growth in remote working means there’s a greater need for an online repository for corporate information. While some companies may initially choose a shared drive solution, the increased risk of cyberattacks and data leaks will undoubtedly mean many seek a more secure option. With its advanced technology, a data room can offer the highest levels of security and privacy, plus its internal messaging feature can mean far fewer emails are clogging up inboxes.

In summary 

Virtual data rooms are enablers of the due diligence process and wider corporate efficiency. They are sophisticated but user-friendly software with advanced features and security measures as standard. 

Choosing the right data room for your needs does mean spending time reviewing how your organisation will use it, the most beneficial features for your company and how it will save you time, effort and money. But, this planning time will really pay off once the pressure of due diligence for a deal begins. 

Finding a data room provider that will work alongside you, not just during purchase and set up but also for the lifetime of your data room, can make all the difference. 24/7 technical support is of course very important, but you also need a partner who will help you maximise the data room’s capabilities to achieve corporate goals. Whether you are a large multi-national company or a smaller, entrepreneurial start-up, a data room can and should adapt to your needs as they evolve over time. 

For more insight into how data rooms support efficient due diligence, read our Ultimate Guide to Due Diligence Success. You can also request a free no-obligation demo to see our data room in action. 

• 2020 Virtual Data Room Market , Allied Market Research
• Europe Virtual Data Room Market Forecast to 2028 , Business Market Insights
• Virtual Data Room Market Statistics 2026 , Allied Market Research

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What is a data room?

What is a data room and why does it play a crucial role in the modern business world? On this page, we'll explain the nature of a data room, why businesses and professionals need them, and the numerous benefits they offer. Whether you're an entrepreneur, a dealmaker, an investor, or simply someone intrigued by the world of business transactions, this page provides insight into an essential tool for securely sharing sensitive information. Let's start with the basics: the definition of a data room.  

Defining a Data Room  

A data room, also known as a virtual data room (VDR) or due diligence data room, is an online repository that serves as a secure hub for storing, organizing, and sharing sensitive documents and information. It acts as a central platform where authorized parties from the sell side and buy side can access and review critical data related to a specific transaction. When dealmakers, sellers or buyers wonder “what is a data room”, they can rely on a professional data room provider for secure and efficient data management.  

Why would you need a data room?   

In today's digital age, where information is vital to decision-making, businesses need a secure and efficient way to share sensitive data during mergers and acquisitions, due diligence (book review), or any other confidential transactions. Cybercrime is increasing enormously, causing more and more companies to become aware of the importance of a secure environment for their file sharing. That's where a professional data room provider comes into play.  

Physical vs virtual data room  

The shift to the digital landscape has already largely replaced piles of paperwork in many industries. This also applies to data rooms, for instance, we hardly see the predecessor of the virtual data room, the physical data rooms. Some companies still remember the sweaty meeting rooms and rooms full of binders. Fortunately, with the larger transactions, these no longer occur, and the virtual data room saves companies a lot of time and money. Professional data room providers offer a modern and secure alternative to physical data rooms.  

Purpose and Functionality of a data room  

The primary purpose of a data room is to facilitate the secure exchange of confidential information during various business processes, such as legal due diligence with mergers and acquisitions (M&A) , fundraising, IPOs, audits, litigation, and intellectual property licensing. Here's how a data room provided by a professional provider works.

Centralized Document storage

A data room allows organizations to upload, store, and manage a wide range of documents, such as legal agreements, financial statements, intellectual property records, contracts, and due diligence reports. These documents are organised into folders and subfolders for easy navigation.

Secure Access Control

Professional data rooms have robust security measures in place to control access to sensitive information. Administrators can grant or revoke permissions for individuals or user groups, ensuring that only authorized parties, such as dealmakers, can view specific documents. This feature provides a high level of confidentiality and minimizes the risk of data leaks or unauthorized disclosures.  

Document Versioning and Tracking

A data room typically offers version control capabilities, enabling users to track changes made to documents over time. This feature helps maintain an accurate audit trail, ensuring transparency and accountability during the deal-making process.  

Q&A and Collaboration

Data rooms often include features for communication and collaboration among authorized users, such as dealmakers. This functionality allows participants to ask questions, share comments, and engage in discussions regarding the documents within the secure environment. It streamlines the due diligence process and promotes efficient decision-making.

Benefits of a data room

• Improved security in comparison to regular storage solutions such as Dropbox or Drive: Professional data rooms employ robust encryption, multi-factor authentication, and other security measures to protect sensitive information from unauthorized access, cyber threats, and data breaches. This level of security provides peace of mind to all parties involved in the transaction. It is a much safer option compared to sending emails or using platforms like Dropbox or Excel files to transfer data.    
• Saves time - Do more in minutes:   With a professional data room, dealmakers can export their completed data collection from Workspaces seamlessly into the data room. Actions such as mass rename, mass upload, or mass download save time and allow users to accomplish more tasks efficiently.    
• Always remain in control: A professional data room allows administrators to create roles, set permissions, and give controlled access up to the document level. This ensures that authorized parties have the necessary access rights and maintains control over the information shared.    
• Global Accessibility and support:   With a professional data room, geographically dispersed teams and external stakeholders can access the information they need 24/7, regardless of their location, time zone, or language. This accessibility promotes collaboration and ensures that all parties, including dealmakers, stay informed throughout the deal-making process. Professional data room providers also offer language support and dedicated customer service to assist users.    
• Monitor your customers on the platform: A professional data room provides insightful dashboards that allow users to monitor how buyers interact with the documents in the data room and Q&A . This information helps dealmakers understand buyers' intentions better and negotiate smarter.  
• Archive : When a deal is closed, it's essential to close the data room too. A professional data room provider allows users to archive all the data from the data room to a USB or Cloud with just one click. The archive serves as a detailed record of the due diligence process, containing all user activity on released documents.  

The next level in dealmaking

By utilizing a professional data room provided by a trusted data room provider, businesses and dealmakers can ensure the secure and efficient exchange of sensitive information during critical transactions while benefiting from enhanced security, time savings, control, global accessibility, and comprehensive monitoring capabilities.  

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Your Data Room questions. Answered

An online data room is a virtual repository that colleagues and external users can access via the Internet. Depending on the role and rights of a user, he/she can view documents within a controlled and secure environment. However, you are in control and determine which users can view which documents. This is all recorded in reports so that you are aware of everything that happens in the data room.

As the name suggests, a virtual data room is a place to store sensitive and confidential files. Being virtual means this information can be accessible from anywhere in the world. Companies that need to carry out due diligence and manage assets throughout their lifecycle typically use virtual data rooms. It’s also useful when entering into a variety of collaborations between business stakeholders. Some examples of this include M&A, Real Estate, Private Equity, Tender, Buy & Build, etc.     Essentially, a virtual data room offer specific sets of features such as advanced permissions, Q&A tool, multiple factor authentication and watermarking and will act as leverage in all sorts of projects that require secure and professional document storage, management and sharing.

You can set up a data room quickly and easily. You have access to a virtual data room via the internet. If you decide to open a Virtual Vaults' data room, you can immediately upload your folder structure in your own environment and, if desired, with the help of the Support Department. As soon as your structure is ready in the data room, you can invite unlimited external users to the roles you've created with different access rights.

Handy functionalities such as the Q&A module make it very easy to work together and smart reports keep you up to date and you know exactly who has viewed which document.

Traditionally a virtual data room's final costs are entirely dependent on two factors. The length of time you will need a virtual data room and the total amount of data storage required. More often than not this does require an estimated calculation of both time and storage needed, meaning on occasion you could incur data overage fees. However, at Virtual Vaults, we offer unlimited data storage for a single flat rate. Meaning you pay one price up front and you only need to decide on your subscription length period.

Virtual Vaults Data Room Unlimited plan offers specific sets of features such as advanced permissions, Q&A tool, multiple factor authentication and watermarking all within a secure data room with no data storage limitations. Unlimited data storage, unlimited features.

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What to include in your startup’s investor data room

In the world of fundraising, a data room is a veritable treasure trove of information for potential investors. Crafting an effective data room and having it ready to share with interested investors is the key to streamlining the due diligence process so you can get from first pitch, to term sheet, to funds wired faster.

What is a data room, and why do you need one to raise funding for your startup?

Simply put, a data room is a secure online destination that allows startups to share all salient information with investors, such as financial documents, legal documents, and other relevant pitch materials. Most data rooms are shared as a password-secured folder sent via Docsend, Microsoft Sharepoint, Google Drive, Dropbox, or similar file-sharing software.

By providing a centralized location for all of this information, a data room streamlines the due diligence process and allows investors to quickly access the data they need to make informed decisions about whether to invest in your company. In this article, we’ll dive into including how to set up a data room for your startup, and what it should include.

As an entrepreneur seeking investment, it is crucial to curate a comprehensive and effective investor data room. Data rooms are also required for later-stage startups exploring mergers and acquisitions (M&A) and/or engaging investment banks. This virtual “room” serves as a repository for all the information that potential investors will need to evaluate your company and make informed decisions about whether or not to invest. So what exactly should be included in your data room?

How to create an investor-ready data room: what to include

A fundraising data room should contain all the salient information necessary for help investors understand your business and make an informed decision. This includes financial statements, market research, customer data, and any other relevant documents. Additionally, it should organize this information in such a way that it is easy for investors to grasp the highlights of the opportunity and reconcile that with the corresponding data. Generally speaking, a fundraising data room should include the following:

Your investor presentation (commonly referred to as a pitch deck) is the crux of your fundraising efforts; you will typically have already shared your pitch deck prior to investors requesting access to your data room. Nevertheless, including your deck in your data room is good form to ensure everything is easily accessible in one place. Your data room should include your most recent pitch deck (tailored to a generic investor). While your pitch deck serves to present your company’s data in an easily digestible format, the data room is intended to serve this information in an “all-you-can-eat” format, so prospective investors can dig into the details. Designing an eye-catching and compelling pitch deck is the prerequisite to getting investors interested in seeing your data room, so don’t skimp on creating your investor presentation — leveraging professionally-designed templates is one way to create a cutting-edge deck, or you may consider hiring an expert .

Executive Summary

The executive summary is also called the investment one-pager or teaser, which is usually a single page overview of your startup. A well-crafted executive summary is an invaluable tool for pitching investors. This document should summarize the key points of your business in an easy-to-read format, and should include an overview of the company’s history, current operations, and future plans. Unlike a pitch deck, an executive summary is often not a confidential document, so investors are welcome to share this document with their partners or other firms to consult about the investment. The executive summary can be thought of as a simple summary of the high-level details of your pitch deck, condensed to one page. Although the typical executive summary is more text-heavy than a pitch deck, you can still design it to be visual & engaging (for instance, by using one of our one-page executive summary templates ).

Investor Memo

Many companies (ie. Rippling , Airbase ) choose to include an investor memo, which is effectively the fundraising equivalent of a cover letter addressed to potential investors. Investor memos often take the form of a formal letter outlining the details of your fundraising efforts and highlights of the opportunity. This can serve as a powerful tool to communicate a company’s fundraising narrative in a written document laying out the strategic vision, investment rationale, and growth expectations. Any VC firm that wants to give you a term sheet has to write an investment memo internally to convince all the stakeholders; founders can expedite this by writing a memo to ensure their story is being told the way they want. The Rippling investor memo (which raised $45M) offers a helpful starting point for founders who may struggle with where to start.

Above all, including the most up-to-date financial information (both historical and projections) in the data room is critical. This includes your balance sheet, income statement, and cash flow statements. When an investor is ready, they will be interested in analyzing your financial model in detail. Most will expect at least one to three years of projections, depending on the stage and maturity of the startup. Typically, an investor or VC firm will analyze a variety of aspects of your financial model (ie. testing the assumptions and resilience to market volatility). Many firms will estimate your valuation by running a discounted cash flow analysis, so be sure to check and validate your assumptions. There’s still no better tool than Excel (or Google Sheets) for creating a financial model — the versatility of spreadsheets always trumps any fancy software, and there are plenty of customizable, professional-grade financial model templates available .

Due Diligence Data

Apart from the above, investors will also want to see the underlying data behind the assumptions in your financials and the claims made in your pitch materials. The supplementary due diligence data should include all the information that investors will need to make an informed decision, such as legal documents, customer and supplier contracts, intellectual property information, market research, financial performance, cap table, management team and more. It is important to make sure that this data is up-to-date and easily accessible in the data room — including a separate “Due Diligence” folder with sub-folders for IP, contracts, legal, and research is one common way to organize this information. Be careful to validate and clearly attribute the data you include, and include the appropriate legal disclaimers as recommended by your counsel.

Summary: What should be in a fundraising data room for investor pitches?

When pitching investors, having the right information in a data room can make or break your fundraising efforts. To summarize, below is an essential list of items that should be included in any data room:

• Pitch Deck: A concise presentation of your startup, used to capture the attention of investors.
• Executive Summary: A one-page document that summarizes the key points of your business in an easy-to-read format.
• Investor Memo: A brief written document or letter to investors outlining the details of your fundraising efforts and highlights of why investors should be interested.
• Financials: Historical and projected financial performance, including your balance sheet, income statement, and cash flow statements.
• Due Diligence Documentation: All supplementary information that investors will need to make an informed decision, such as legal documents, customer and supplier contracts, intellectual property information, and more.

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Your comprehensive guide to finding the perfect VDR

Keith Rabkin Chief Revenue Officer for PandaDoc

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If you’re new to virtual data rooms (VDRs), there’s a chance you have questions.

And guess what? We’ve got answers.

VDRs, also referred to as deal rooms or electronic data rooms, take a bit of getting used to – but they are excellent investments for companies of any size —and we’re here to guide you through finding one that meets your needs.

According to Morgan Stanley, the number of mergers and acquisitions (M&A) could rise by as much as 50% in 2024 , 1 after the lowest activity in almost two decades in 2023.

With more deals comes a need to get things done, well…better.

What is a virtual data room?

A virtual data room (VDR) is a secure, centralized hub where parties from all sides can organize and share resources, collaborate, negotiate, and track documents.

What is the purpose of a virtual data room?

• In sales, deals, mergers, and acquisitions, VDRs streamline due diligence processes, enabling stakeholders to share, review, and negotiate contracts , NDAs , and financial statements with precision and efficiency. Sales teams can use them to utilize various media formats for selling (videos, presentations, etc.) and consolidate all complex deal data in one location to maximize deal flow automation.
• Legal professionals rely on VDRs to manage case files, maintain client confidentiality, and ensure compliance with stringent regulations.
• Healthcare organizations leverage VDRs to safeguard electronic health records (EHRs) and medical research data, fostering collaboration among healthcare professionals while maintaining strict privacy standards .
• In private equity, VDRs facilitate due diligence, portfolio management, and investor communications, ensuring transparency and trust among stakeholders.
• For tech companies managing intellectual property (IP) and complex licensing agreements, VDRs provide a secure environment to safeguard proprietary technology documentation and foster innovation through streamlined collaboration among cross-functional teams.

What are the best virtual data room providers?

Let’s now explore the market-leading data room providers, together with their features and support options to identify the best VDR providers for your business’s data needs:

1. PandaDoc

PandaDoc Rooms makes it easy to share your business virtual data room with team members via direct link or email.

Choose from varied document customization options to ensure your information is only seen by authorized members.

An intuitive and guided signing experience guarantees that no one skips important document signatures, and you’ll be informed of any document changes in your virtual data room immediately.

PandaDoc Rooms delivers a new method of collaboration on complex multi-document deals with any number of participants.

Key features:

• Alerts/notifications
• Archiving & retention
• Audit trail
• Collaboration tools
• Compliance tracking
• Customizable templates
• Document classification
• Document generation
• Drag & drop editor
• Electronic signature
• File conversion
• Search/filter
• Third-party integrations— Slack , Salesforce, Zoom, Google Workspace, Canva , Pipedrive , Zoho, Google Docs, and many more
• Version control
• Workflow management.

A full suite of support is available, including:

• Email/help desk
• Knowledge base
• Phone support
• 24/7 (live rep)

Thanks to PandaDoc, you can:

• Share documents with relevant recipients with a few clicks
• Easily provide prospect content
• Conveniently define data access levels
• Minimize processing delays and editing conflicts.

With PandaDoc Rooms, you can use VDR as sales rooms to share documents, collaborate with buyers, and automate your sales cycle from end-to-end.

This means that you can start selling even before the first call!

Use the intuitive sales workflows to guide a client through your promotional materials, request data from prospects, and collect and store data related to the same business transaction in a single space.

PandaDoc empowers you to share data in any format, including video, presentation, sheets, or docs, so you can share the precise content you need for the best impression.

Set up and manage visibility permissions for each document to ensure the right people see the right things.

iDeals allow you to upload business files in 25+ different formats, making it simple to get the information into your virtual data room without extra preparation and fuss.

Compared to PandaDoc, the standard workflows integrated with iDeals don’t offer as much flexibility for project management purposes.

Optical character recognition and full text search features track down the information you want using multiple search filters.

iDeals enables the upload, deletion, merging, moving, viewing, downloading, restoring, and renaming of your files and folders easily, plus you can merge the content of several files into a single PDF file.

• Audit trails
• Built-in redaction
• Customizable dynamic watermarks
• Custom terms of access / NDA
• Custom branding
• Drag-and-drop file upload
• Notes and comments
• Optical character recognition
• Scheduled reports via email
• Screenshot prevention
• Standard Q&A management process
• Standard workflows
• Two-factor authentication
• Two hardware-encrypted USB drives with data room archive
• 24/7 multilingual support via email, chat, and phone. Extended premier support is available on the Business plan.

3. Datasite

Datasite is a secure web-based app that operates on Mac or Windows systems.

There’s also a Datasite mobile app that you can use to manage your data on an iOS or Android device.

However, the complex interface in contrast to PandaDoc’s user-friendly platform might pose a problem for some less technical users.

One key feature of Datasite’s solution is AI redaction, allowing you to easily and confidently manage your redactions by finding instances of specific words across the virtual data room.

• AI redaction
• Content categorization
• Customizable watermarking
• Data encryption at transit and at rest
• Email file upload
• Granular permissions management
• Integrated Q&A
• Multilingual search
• Two-factor and multi-factor authentication
• Phone support landlines are available for the United States, Canada, Latin America, EMEA, and APAC countries.
• Live chat support is available, together with demo videos, live training classes, and customer forums.

Digify is cloud-based software that provides oversight, protection, and tracking of your business documents.

You get some third-party integrations but not the full suite with some virtual data room solutions — for instance, PandaDoc offers 30+ business application integrations.

This all-in-one solution integrates document access control, advanced encryption, print and download permissions, and customizable watermarks to give you and your team control over your sensitive data.

• Brand colors and logos
• Data room groups
• Folder-level granular permissions
• One-click NDA/terms of access
• Real-time notifications
• Team-wide file statistics
• Third party integrations—Dropbox, Box, Google Drive
• Unlimited data rooms with one account
• Email and chat support is available on the Pro plan
• With the Team plan you get additional phone support

5. DealRoom

DealRoom provides a solution for businesses of all sizes to securely store and share sensitive information with interested parties.

All your business data is encrypted with 256-bit AES encryption to stop hackers from accessing your documents.

Cloud backups keep your data safe in the event of system failures or network crashes.

• Access permissions
• Built-in Excel and document viewer
• Dynamic or fixed watermarks
• File expiration tool
• Full text search
• One-click NDAs
• Multi-factor authentication
• Recovery capability
• Reporting and analytics
• Screen Shield
• SSL security
• Third party integrations—Google Drive, Box, Gmail, Outlook
• 24/7 support via email, helpdesk, phone support, and chat.

How do I create a secure data room?

How it works:

• Create and publish your room : Gather all your proposals, contracts, presentations, and other relevant files in a PandaDoc Room. Set visibility permissions to ensure the right content is marked “ visible to all Room members. ”
• Generate your link : Once the Room is ready, publish it and generate a unique Room Sharing link.
• Share the link : Send the link to your client via email, chat, or share it through any communication channel you prefer.
• When clients open the Room via the shared link, they’ll enter a preview mode. This allows them to see content marked as “visible to all Room members.”
• To perform actions (like signing a document) or view restricted content, users will need to verify their access through their email.

See how it looks! Check out this virtual room:

Benefits of a virtual deal room

Unified workspace.

Consolidate all documents, materials, and communications in a shared space, accessible anytime, anywhere.

Share any content you need

Effortlessly share various content types, from videos and presentations to sheets and docs – we’ve got you covered!

Automated workflows

Eliminate manual document sending to save time and keep your work moving forward seamlessly.

Personalized branding

Enhance your professional image with custom branding, incorporating your company logo and identity for a cohesive user experience.

How much does a virtual data room cost?

Some VDR providers offer pricing based on usage, such as per-page or per-user pricing, which can be more cost-effective for businesses with sporadic or occasional data room needs.

For example, here’s how PandaDoc’s pricing works.

If you sign up for a Business plan ($49/month), you receive access to 3 Rooms – all workspaces combined, after which you have to upgrade to Enterprise.

If you’re signed up as a PandaDoc Enterprise client, you enjoy access to unlimited rooms.

For a detailed breakdown on virtual data room pricing, read more .

Are virtual data rooms the answer?

In a paper published by the Institute of Mergers, Acquisitions and Alliances (MANDA) paper, researchers explored the value that virtual data rooms (VDRs) bring to the mergers and acquisitions (M&A) process.

It investigates how VDRs enhance efficiency, security, and collaboration in due diligence activities, deal negotiations, and post-merger integration.

Through case studies and empirical analysis, the authors demonstrate the tangible benefits of VDRs in facilitating smoother transactions, reducing costs, and improving deal outcomes for both buyers and sellers in M&A deals. 2

Because everything feels less intimidating when you take it one step at a time (including adopting a VDR for your business), we’ve organized all of these common virtual room software questions so you can quickly find what you need.

From pricing considerations to scalability and functionality, this guide will equip you with the knowledge to choose the best VDR for your business needs, including user activity tracking, secure document sharing, NDAs, mobile app integration, messaging features, and adherence to ISO 27001 standards.

Keep reading for our tips—and bookmark this page for later.

Get excited—here’s where it all begins.

If you’re just getting started and have some questions about cloud-based VDR providers, let us take it from here.

How to find the virtual data room to meet your needs

Selecting the right data room software for your business is a crucial decision that can significantly impact your operations and data security.

Make sure you evaluate what a data room offers before you invest resources, time, and energy into a new software.

Compare features

Create a checklist of features and functionalities that are important to your business, like ensuring that sensitive data is protected.

Compare different data room software options based on criteria such as:

• Security features
• Secure file sharing
• Document management capabilities
• User interface
• Customization options
• Pricing plans
• Notifications
• Activity tracking
• Advanced search

Evaluate security

Data security is paramount when selecting a virtual data room solution.

Assess the security measures implemented by each vendor, including:

• Encryption protocols
• Access controls
• Compliance certifications (such as GDPR or SOC 2)

Consider ease of use

User experience plays a significant role in the adoption and success of data room software.

Choose a solution that offers an intuitive interface and user-friendly navigation to streamline collaboration and document management processes.

Look for features such as drag-and-drop functionality, search capabilities, and customizable workspaces.

Request demos and trials

Before making a final decision, request demos or trial periods from your shortlisted vendors.

This will allow you to experience the software firsthand and assess its suitability for your business needs.

Take advantage of this opportunity to ask questions, test key features, and solicit feedback from stakeholders.

Unlock a new way of working on multi-document deals

Before you make a decision on your virtual data room provider, ensure you do your own due diligence and evaluate your team’s feature requirements, integrations, and user experience.

By doing so, you will be able to assess each VDR provider objectively, making it easier to find the ideal solution.

Before finalizing your decision, don’t hesitate to compare multiple options by trying their demos.

Most of the virtual data rooms we’ve covered in this article offer a free trial so you can test them to see what you think.

Create your virtual data rooms with a solution like PandaDoc and you’ll not only gain complete control of your business’s information, but you can also explore a variety of additional document services like eSigning products, contract management tools, and document automation .

Frequently asked questions

Why do companies use vdrs.

To streamline document management, facilitate collaboration among stakeholders, and enable efficient communication, making them essential tools for conducting secure and organized business transactions.

Are VDRs secure?

Yes, VDRs are often deemed more secure than physical documents since you can assign viewing and signing permissions, document tracking, audit trails, and eliminate the risk of loss during transit.

What is an example of a virtual data room?

Virtual data rooms have a number of use cases – from M&A to HR/onboarding to legal and sales. Imagine a secure virtual repository where parties can share documents, and collaborate with enhanced security, permissions, and encryption. It’s like a document nightclub, but you choose the guestlist.

How much do data rooms cost?

Data room pricing varies depending on provider. For example, PandaDoc data rooms cost $49 USD per seat cost per month – which is up to 60% cheaper than other providers and provides a cost-effective alternative to in-person meetings and paper documents.

PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDocs services are governed by our Terms of Use and Privacy Policy.

Originally published May 12, 2023, updated June 21, 2023

• Morgan Stanley, Why 2024 Could Be a Hot Year for M&A Show in the article ↑
• Institute of Mergers, Acquisitions and Alliances (MANDA), ‘ DO VIRTUAL DATA ROOMS ADD VALUE TO THE MERGERS AND ACQUISITIONS PROCESS? ‘ Show in the article ↑

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Investor Data Room Best Practices & Guide (Startup-Friendly)

Kison Patel is the Founder and CEO of DealRoom, a Chicago-based diligence management software that uses Agile principles to innovate and modernize the finance industry. As a former M&A advisor with over a decade of experience, Kison developed DealRoom after seeing first hand a number of deep-seated, industry-wide structural issues and inefficiencies.

For the modern company considering M&A or raising capital, the data room is not so much of a management decision as a strategic necessity.

Potential investors, buyers and sellers, and even intermediaries now use virtual data rooms as standard, so the issue then becomes understanding which one works best for you, and how to build it for better outcomes.

FirmRoom has developed what we believe to be the most intelligent and user-friendly virtual data room available on the market today.

In this article, we look at how new users should approach data rooms - be that FirmRoom’s own solution or any other - and show exactly how virtual data rooms create significant value for investors.

Do you Even Need a Data Room?

It’s only honest of us to say that you may not need a data room. How do you know whether you need one or not?

Let’s put it this way: The greater your need for confidentiality, the greater your need for a data room.

In the highly unlikely event that there’s nothing confidential in your business plan or pitch deck , there’s nothing that could raise eyebrows in your financial statement, or there’s nothing that you’d want industry rivals to see in your company strategy documents, you should be absolutely fine without a data room.

How do Investor Data Rooms Benefit Startups?

A common misconception among those who have never used virtual data rooms is that they offer a kind of glorified storage system.

Safe data storage is just one part of a much larger story where virtual data rooms are concerned.

For startups, there are a host of benefits in using data rooms, such as:

Increased efficiency and efficacy

Think of an intelligent virtual data room system as an office manager specialized in M&A. Like a good office manager, a virtual data room enables processes (especially administrative processes) run more smoothly. However, it does so at a fraction of the cost of an office manager.

Enhanced security

Virtual data rooms enable users to create user hierarchies, control entry settings (e.g. NDA-approved users only), and ensure that no documents are copied (through screen grabs) or downloaded. None of this is possible when sharing physical documentation containing sensitive information.

User friendly

The name ‘intelligent virtual dataroom’ might scare away some users. The intelligent essentially means that the best modern systems have been designed with end users at top of mind; and with FirmRoom, we even provide checklists for due diligence regardless of the size, transaction type or industry sector of your deal.

Accurate information

A well organized data room enables a user to provide third parties with every piece of relevant information through the click of a button. No more duplicated files, endless email threads, or outdated copies sent in error. They receive the accurate, up-to-date information they need as they request it.

How to Leverage Data Rooms for Startups ‍

Aside from the benefits outlined in the previous section, a virtual data room endows its users with another benefit: It signals professionalism, showing potential investors that you’re putting together an institutional-quality package.

Make it easy for them: The most sought-after investors are already short on time and won’t appreciate having to chase you up for documentation.

This means putting together a virtual data room as soon as you’ve made the decision to begin the fundraising process .

Leverage your data room as follows:

Ensure the data room is where relevant information is stored

Along the way, you’ll continually add, remove, and update documents. Keep the most updated versions in the virtual deal room, giving you the flexibility to show investors where you are at any given point.

Provide links to executive and non-executive directors and advisors

Ensure that every time a document is added, everyone is seeing what’s going on. One of the best ways to leverage a virtual data room is as a centralized points of sharing information. The more often your advisors see what’s going on, the more they’ll provide value adding feedback.

Tell the company’s story

Remember that the data room is functional but that’s only half of it: Leverage it to tell the company’s story and to put your company in its best light. Investing in the virtual data room is an excellent first step. To really make it count, ensure the information there closes the deal for your company.

Investor Data Rooms Best Practices

Ensure structure from the outset.

A virtual data room, much like the physical ones that preceded it, needs structure to be really valuable. Make sure that this is in place from the outset.

Create clear divisions between sections - a section for financials, legal documents, HR documents, etc. Make it such that a user who has never entered before would know where to find what they’re looking for from the structure you’ve created.

You can replicate our recommended data room structure get your free data room index template here.

Continuously update

An old document is usually not only a sign that you’re not updating enough (e.g. last year’s financials rather than this quarter’s), but also that you’ve been looking for investment for a long time and haven’t been successful yet. Continuously update documents in the virtual data room. We cannot stress this enough.

First time walk throughs

Good practice is to hold the hands of investors on their first view of the virtual deal room. This way you can avoid them getting lost, ensure that they’re looking at your information, and they can enter and navigate the system on their own. It also shows a level of care that will likely stand you out from the pack.

What to Include in Your Investor Data Room

What to include in the data room is one of the things that confounds many startup users who assumed that a teaser and a pitch deck was all that they required to achieve millions of dollars of funding. It’s going to take a little more than that. Below, we’ve outlined some of the broad headings that you should consider including the data room offering for investors.

1. Business Plan and Marketing Materials

Why? The likelihood is that investors will already have seen at least some of these documents but they’re the most important of all, so should be included. It should go without saying that none of the information in the documents should conflict with information elsewhere in the data room.

• Teaser document
• Business plan
• Investment memorandum

2. Intellectual Property

Why? Not every company has intellectual property but if you do, the chances are that it will be one of the first things that investors want to see. If it adds value to your company and makes it a unique proposition, it has to be here.

• Granted and filed patents
• Intellectual property strategy

3. Financial Statements

Why? This could easily be number one on this list. Don’t worry if you’re a loss making company with a big idea. So are Slack and Uber. The important thing is to have clear, transparent financials. Ensure that there are zero errors here.

• Sources and uses of funds
• Income statement, balance sheet, and cash flow statements (3 years max, and no requirement to be audited)
• Company valuation based on 2. above.
• Pro-forma statements for next year
• Details of outstanding debt
• Tax returns (if available)
• Cap tables, showing positions of all existing shareholders and investments to date ‍

4. Sales and Marketing

Why? The sales and marketing plan is ultimately what underpins the future success of your business. Investors are ultimately looking for traction, so all your sales and marketing efforts and results need to be outlined here.

• Marketing research conducted
• Current sales pipeline
• Details of sales process
• Customer churn (and how it’s being addressed).
• Customer acquisition cost (if applicable)
• (Projected) Average revenue per customer

5. Technology

Why? As the saying goes, “every company is a technology company,” so outline whatever your company’s technological prowess or capabilities here.

• Overview of technology stack
• Details of APIs, integrations, and system architecture

6. The Team

Why? The expression, “investors invest in people not businesses” may sound trite, but it comes up again and again for a reason. Put your best foot forward and show investors that you and your team are somebody that they can trust their money with.

• Detailed resumes of key management
• Employee information (resumes, roles within the company, remuneration)

This list is succinct enough to provide everything that an investor requires to make an informed decision on the investment opportunity. It doesn’t overwhelm them with information or use a scattergun approach to providing data (which can also suggest a lack of focus on your behalf).

7. Press Releases, Endorsements, and Testimonies

Why? Including this information gives the onlooking investors a kind of proof of concept that will stand your company out. Showing how your SAAS product works in the pitch deck is all very well(and necessary), but if you have a Fortune 100 company willing to sing it’s praises, suddenly you’ve got a whole new investor proposition. The same could also be said of good reviews in press clippings or media. Note: This does not include PR Newswire.

8. Regulatory and Compliance

Why? Including this is another signal to investors that you’re on top of things. They’ll probably skip this by until the due diligence phase, but that doesn’t mean it shouldn’t be in the virtual data room from the start. This could include documents such as the company’s necessary operating licences, environmental impact assessments, or other forms of documentation that show your company is compliant (answering a question for investors before it even comes up).

What not to include?

If the list of items to include is short, by contrast the list of items to exclude is extensive. You may like the new fit out at your office, but investors don’t want to know. It’s also important not to overstate your credentials on your resume.

You may think you’re a visionary. Investors won’t.

As a general rule, avoid disclosing too many details about IP or strategy. In a way, your company’s strategy is a kind of informal IP. You can’t let everyone know what’s in your secret sauce.Disclose just enough, but keep a more detailed view of strategy for due diligence.

How to Choose the Best Data Room for Startups?

The range of features that the best virtual data rooms offer users mean that researching the solution that suits your requirements best is a valuable use of your time.

DealRoom has put together an objective review of what we believe to be the best M&A virtual data room solutions available on the market, showing issues as cost, features, deal management, collaboration and reporting capabilities.

It’s worthwhile spending some time mulling over your options here and considering which solution fits your needs best.

How to Set Up an Investor Data Room with FirmRoom

If you believe that you still require a data room for your company, FirmRoom is an excellent place to start and offers a free trial.

Follow the steps below and enjoy full access for your 30-day trial period:

• Start a free trial.
• Create your folder structure and upload the relevant documents.
• Create a group for investors and set view-only permissions to the files.
• Invite investors to view your data room.

Utilized well, the virtual data room can be the hidden champion of your M&A or fundraising process.

It adds significant value, not just to its users, but to third parties including investors and intermediaries. At every stage of the journey, it provides more accurate information, increased transparency, and ease of access to information as it is required.

This can be of significant benefit to companies even when they’re not actively fundraising. The best advice any company with growth ambitions could receive is to make the investment in a virtual deal room as a platform to achieve that growth.

Frequently Asked Questions (FAQs)

See how firmroom improves your investor data room experience..

Virtual Data Room Comparison Guide

Compare VDRs and see the whole picture when it comes to choosing the best data room for your business.

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Training & Support

What is a Data Room for Investors - What to Include?

September 18, 2022

Adam Hoeksema

If you are an entrepreneur looking to raise capital from angel investors or venture capitalists and a potential investor just asked you for access to your data room and you nodded your head and pretended like you knew what that meant and then immediately after the meeting you Googled “what is a data room” don’t worry you aren’t alone!  

Being an entrepreneur often means that you have to learn on the fly.  

So in this article my hope is to help take you from hearing about a data room for the first time in an investor meeting, to quickly pulling together a data room for your potential investors.  Here is what I hope to cover:

What is a Data Room for Investors?

Why is a data room important.

• What is Due Diligence? 

Do I Really Need a Data Room for my Startup?

How to set up a data room, what should be included in a data room for due diligence, how to clean up your data room for due diligence - and quickly.

• What Software to Use for an Investor Data Room?

With that as a framework, let’s dive in! 

A startup data room is simply a location where a startup can store their important due diligence documents and control who can access the documents.  If it sounds like a Google Drive folder or Dropbox folder you aren’t far off, in fact, a shared folder like a Google Drive or Dropbox folder could work for you as a quick and simple data room.  There are probably some good reasons to use a more purpose built software to manage your data room and we will discuss that later, but in a pinch a data room for investors can be as simple as a shared Google Drive folder. 

A data room is a way to share important documents with potential investors during due diligence.  You want to be able to quickly and easily share your key documents with investors without having to email a bunch of confidential documents to each individual investor.  I guess the other reason a data room is important is simply because many investors have come to expect that you have an organized data room to make their job of due diligence easier.   

What is Due Diligence?

Let’s make sure we are on the same page about what due diligence is.  Investor due diligence is the process of reviewing important source documents and data to confirm that the story the entrepreneur is telling in the pitch deck lines up with reality.  Different investors complete different levels of due diligence depending on the specific company and the situation.  Depending on the situation, sometimes the investor is in the driver seat and can demand higher levels of due diligence, but for really hot deals and high growth startups, the entrepreneur may be in the driver’s seat and can force the investor to make an investment decision before they have the opportunity to complete all of the due diligence that they might like to complete.  

So what exactly will investors look for during due diligence?  Let’s dive into that next.   

As I just mentioned, the amount and level of due diligence that an investor might require can vary from investor to investor and depending on whether the investor or entrepreneur has the upper hand in the deal.  Here is a list of documents and data that may be requested during investor due diligence:

Investor Due Diligence Data Room Document Checklist

The following list aims to be a comprehensive list of documents and data that you might need to provide to potential investors during the due diligence process. 

Startup Legal Documents - Due Diligence

You will want to provide your incorporation documents and company bylaws along with any contracts or agreements that are material to your business.  So if you just got a very large contract that represents 50% of your annual revenue, an investor will likely ask to review that contract. Documents may include:

• Articles of Incorporation
• Material Contracts or Agreements
• Any current or pending lawsuit documentation

Employee Documents - Due Diligence

Investor legal team may want to review any employee agreements, non compete agreements, and employee stock option agreements.  They may also want to confirm that you don’t have any hidden HR nightmares or legal issues brewing. 

• Employment Agreements
• Employee Non Compete Agreements
• Employee Stock Option Agreements

Financial Documents - Due Diligence

Investors may ask to review bank statements to confirm that the financial statements you are providing are accurate.  This can help investors avoid founders that simply provide fraudulent financial statements. You will also want to provide all historical income statements that you have available plus your current balance sheet.  Next you will need to provide your current cap table so that investors can understand the current ownership of the business. Finally, you will want to include your financial projections as well. 

• Bank Statements
• Historical Income Statement
• Current Balance Sheet - (Download our free balance sheet template )
• Pro Forma Financial Projections - (Check out our library of 70+ projection templates )
• Previous Investment Agreements, Convertible Notes, etc

Intellectual Property Documents - Due Diligence

Don’t be surprised if investors want to review your intellectual property like trademarks, copyrights and patents.  Investors may also ask to review software source code.  This is a little bit tricky.  On the one hand it makes sense that investors want to get an idea of the codebase that they are investing in, but it also makes sense that you don’t want to just handover your code base to just anyone.  This may be a negotiation. 

• Software source code

Other Due Diligence Documents

You could include a business plan and pitch deck as well. 

• Business Plan

Data Access During Due Diligence

Investors will want to review your Google Analytics to confirm the traffic and conversion rates etc on your website and confirm any growth trends.  Likewise access to your Stripe account or payment processing provider will allow the investor to confirm things like customer churn rates. 

• Access to Google Analytics
• Access to Stripe Account

What documents are we missing from our list? 

After reviewing that list you are probably wondering, do I really need to provide all of this data?  There is some debate about whether a data room is necessary.  Mark Suster wrote a blog post titled Why you Should Never Have a Data Room and gave some compelling reasons not to have a data room.  The short of his point is that a data room is where a deal goes to die.  Once investors are looking at all of these documents, of course they are going to find issues and those issues are going to slow down the deal and probably kill it.  The best startups are often growing so fast and there is so much investor interest that investors are forced to make an investment decision before they can review every single document in your data room.  Mark’s point was that providing all of this data access is a waste of time for the entrepreneur and basically you should just focus on growing the business such that investors can’t ignore the investment opportunity and just dive in to invest with limited due diligence.  

I think there is probably a lot of truth to what Mark is saying, BUT not every founder can be lucky enough to be growing so fast with such great market opportunity that they can be so picky with investors.  I think that it could be that your startup won’t be in the top 5% of investor backed startups, and so you might need to do a bit more work to lure in those investors which might mean providing these docs in a data room, but I think you can still be successful and still raise capital to help grow your business with investors that might want to do more due diligence than what Mark suggests.  

So my answer is - yes.  Yes you should at least be open to providing investors with a data room full of due diligence documents. 

As I mentioned previously, in a pinch, you could probably just use a Google Drive shared folder as your data room, but there are some purpose built tools available with some nice features that you might want to consider.  For example, Dealroom provides a secure data room product that will allow you to have a bit more control over your documents.  Investors will just review the documents from the platform, you will get to see who viewed your documents and you will have the confidence that investors aren’t just passing around your sensitive data because the docs will only be available to view in the data room product. 

The most likely scenario if you are a fast growing company that might be able to secure investor funding is that you have been so busy with growth, that you don’t have all of your data room docs cleaned up and organized.  I came across an interesting company that can help you quickly produce any documents that you should probably have in place but don’t yet.  Savvi can provide you with:

• Due Diligence Clean Up and Maintenance 
• Data Room Creation and Up Keep
• Investor Onboarding

I have not personally used Savvi, but had some conversations with their team and thought it seemed like they could be really helpful in getting your data room up and running.  

Financial Projections for Due Diligence

Finally, at ProjectionHub we help startups create financial projections for potential investors which can be a key piece of the due diligence process.  We have a library of over 70 financial projection templates that will help you produce investor ready financial projections in short order and if you need some help, check out our custom financial modeling services as well. 

And if you're looking to get more proficient at creating projections yourself, check out this free course to learn the ropes:

Best of luck in your fundraising efforts!

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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Advantages of Virtual Data Rooms for Startups: Boosting Confidentiality & Collaboration

How startups maintain confidentiality, organization, and seamless collaboration may seem challenging. Fortunately, a secure digital solution already exists. Virtual data rooms (VDRs) revolutionize the way startups and potential investors handle sensitive information. 

The article explores the advantages of virtual data rooms for startups. We analyze what essential documents to include in an investor data room and what to avoid. Furthermore, we list top data room providers tailored to startups’ needs.

What is a virtual data room for startups?

A virtual data room (VDR) serves as an extremely secure online platform for storing confidential documents. It offers a safe solution for sensitive information presented to potential investors, partners, or buyers. Also, a carefully laid out VDR accelerates capital raising, due diligence, and collaborative efforts within the startup ecosystem. 

It’s essential to ensure you have a well-organized data room to win their trust and support for your venture.

Why do startups need a virtual data room?

First of all, startups are not just about innovative ideas. The trick is to convince investors that these ideas are worthy of their time and financing. Let’s explore how data room software benefits startups.

• Data protection . Virtual data rooms provide strong security measures for various types of sensitive information. It includes encryption technologies, multi-factor authentication, and role-based access controls. 
• Improved organization . A startup data room enables an effective and neat way of categorizing and managing documents. Furthermore, advanced and partial text searches simplify finding relevant files.
• Increased deal speed and ease . Virtual data rooms offer real-time document sharing, collaboration, and instant access to information. Centralizing all your documents in one place ensures a streamlined process and optimal speed for the deal.
• Improved perception of your company . Investors consider both the startup’s idea viability and its professionalism. A well-organized VDR demonstrates that the startup takes its business seriously and values transparency.
• Enhanced engagement . Thanks to real-time reporting, startup founders can get comprehensive analytical data on every buy-side click. Virtual data rooms enable management teams to focus on genuinely engaged parties through personalized follow-ups and notifications.

What to include in an investor data room?

Determining the content for your investor data room requires some time and effort. Startup founders don’t want to overwhelm or provide too little information. The goal of a VDR here is to accelerate capital raising. Remember, your investor data room is a reflection of your startup.

Let’s explore the documents investors need for a successful fundraising campaign.

This is your startup’s elevator pitch in presentation form. It’s a concise yet comprehensive overview of your business, highlighting your unique value proposition , market opportunity , and growth strategy . Your pitch deck should be engaging, visually appealing, and easy to understand, making it the perfect introduction to your startup.

As stated in the Forbes report , the value of your pitch deck stands as one of the most influential factors impacting the level of funding a business secures.

Consider these additional components to include in your pitch deck:

• Go-to-market strategy
• Growth strategy
• Competitive analysis
• Exit strategy

Team resumes

Your team is one of your startup’s most valuable assets. Include detailed resumes that showcase your team’s skills, experience, and achievements. Highlight any relevant industry experience, educational qualifications, and unique skills that make your team stand out.

Ensure you cover all the necessary bases by considering the following aspects:

• Roles and responsibilities
• Advisory board
• Team culture

Business plan

The business plan acts as a navigational guide, charting the course for your startup’s endeavors. It outlines your mission , vision , target market , competitive analysis , and financial projections . Demonstrating a clear strategy and a deep comprehension of your market makes your investors confident.

Consider including the following documents in your investor data room: 

• Business model
• Funding request
• Value proposition
• Risk analysis

Marketing plan 

Your marketing plan is your strategy for attracting and retaining customers. A well-rounded business plan should encompass a detailed analysis of your target audience , an overview of your marketing channels , and a defined set of KPIs. 

According to a CB Insights report , misreading market demand accounts for 42% of failed startups.

Consider these essential aspects for your investor data room:

• Branding and positioning
• Budget allocation
• Adaptation and optimization
• Partnerships and collaborations

Action plan 

The action plan outlines both short-term and long-term goals , along with the actionable steps required. It shows investors that you’re proactive, organized, and committed to your startup’s success. 

There are additional components to be included in your investor data room:

• Milestones and timelines
• Monitoring and evaluation
• SMART goals and objectives

Business licenses 

Your business licenses demonstrate that your startup complies with relevant laws and regulations. In turn, they show investors that you’re serious about your business and committed to operating legally and ethically. This category includes the following documents: 

• Business registration
• Permits and certifications
• Compliance documentation
• Intellectual property registrations

Financial statements

Your financial statements provide detailed insights into your startup’s financial well-being. In particular, income statements , balance sheets , and cash flow statements provide an overview of your financial situation. 

Here are additional components to your financial statement documentation:

• Statement of changes in equity
• Audit reports
• Management discussion and analysis (MD&A)
• Financial ratios

Intellectual property

If your startup has any intellectual property, such as patents , trademarks , or copyrights , include the relevant documentation. This shows investors that your ideas are protected and that you’re serious about defending your competitive advantage. Let’s see what else can be included here:

• Trade secrets

By including these elements in your investor data room, you effectively communicate your startup’s story, showcase your team’s capabilities, and instill confidence in potential investors.

For a more detailed guide on building an investor data room, check out the article by Alejandro Cremades .

What not to include in an investor data room

Maintaining control of your narrative during fundraising is crucial as a founder. To ensure this, take proactive steps to curate your investor data room with the right information. The Visible Blog lists the following advice on what shouldn’t be included:

• Include only relevant information that investors need for their decision-making process.
• Avoid including non-essential documents that may distract or overwhelm investors.
• Be cautious with sensitive information. 
• Tailor the content to the investor’s specific stage in the journey.

Top data rooms for startups

  iDeals is known for its robust security features and advanced document protection measures. Based on client reviews , top-notch security, excellent customer support, and ease of use are what users appreciate the most. iDeals provides superior protection with features such as 2FA, watermarks, and document redaction. Additional features include the following:

• Eight levels of granular access permissions 
• Detailed activity tracking
• Comprehensive analytics

Onehub stands out with its intuitive interface and collaborative features, making it easy for startups to organize, manage, and share documents. With Onehub, startups can streamline the due diligence process and enhance communication with investors. Also, this user-friendly platform provides the following features:

• Custom session timeouts
• Document commenting
• Workflow tasks

This provider of data room software for startups prioritizes simplicity and effortless navigation. Its intuitive interface ensures a smooth onboarding process for your team. SecureDocs offers the following technologies:

• Electronic signature and templates
• Advanced search 
• 24/7 customer support

Ansarada’s data room is designed specifically for deal-making during capital-raising campaigns. Its AI-powered insights provide valuable data-driven recommendations to improve the deal-making process. Ansarada also offers comprehensive tools such as:

• Q&A within the data room
• Granular group permissions

Venue offers a data room solution with a focus on teamwork and productivity. Its real-time editing feature facilitates real-time collaboration on documents with multiple team members. Additionally, Venue offers:

• AI contract analysis
• Advanced permissions
• Procurement management

Key takeaways

• You can share and review sensitive information quickly and securely in virtual data rooms for startups.
• A well-organized VDR offers benefits like data protection , improved organization , faster deal processes , enhanced company perception , and real-time reporting .
• To maximize the data room’s effectiveness, startups should avoid including non-essential information and tailor the content to the investor’s specific stage.
• Choose a virtual data room for startups based on your company’s needs, expected software features, and data security level.
• Before establishing a virtual data room, startups should thoroughly assess feedback from independent review platforms.

How to Start a Virtual Data Room – Sample Business Plan Template

By: Author Tony Martins Ajaero

Home » Business ideas » Technology Industry » Data Science

Do you want to start a virtual data room company from scratch? Or you need a sample virtual data room business plan template? If YES, then i advice you read on. With increasing risk of data loss due to system errors, natural disasters, and hacks, businesses are now turning away from traditional data storage systems in favor of web-based, secure, third-party storage systems known as virtual data rooms.

Virtual data rooms allow businesses that handle huge volumes of information to store and access lots–thousands and thousands–of documents in the cloud. In modern day business transactions, huge amounts of information change hands between the customers and businesses.

These pieces of information need to be stored for future use. And considering that they are sensitive and complicated, there is a need to set up access control system to determine who is allowed to see what. Virtual data rooms provide allow users to set up such systems and provide detailed tracking services that reveal who accessed what, and at what time.

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Virtual data rooms are not new. They have only replaced the physical “ document rooms ” that many law firms, financial companies, and other business used to employ during deals. Their emergence became necessary when virtually everything started migrating to the web.

Virtual data rooms service all types of businesses that need to share information with third parties. Big new users of virtual data rooms include pharmaceutical companies, healthcare establishments, and government agencies. The increase in number of bankruptcies, caused by the worsening economic conditions experienced in most parts of the world has increased the use of virtual data rooms by the parties involved in restructuring or unwinding corporate liabilities.

Virtual data rooms are expected to continue growing at a fast pace because more and more paper-intensive businesses and organizations are taking to the cloud, and consumers are getting to realize the multiple benefits of sharing data. In 2012, the virtual data room market was worth $628 million, and the market is likely to grow to a whopping $1.2 trillion by 2017, according to IBIS, a research firm based in California.

Now, do you have a solid background in programming? Are you looking to start your own business and are considering starting a virtual room? If YES, then I advice you read on to understand more about the business.

Starting a Virtual Data Room – Sample Business Plan Template

1. getting started.

Starting a virtual data room business involves about the same steps as with any other business. Start by learning more about the business. Read online resources to understand more about the business. Contact a seasoned expert in the business to learn all you need to know before taking plunge. And gather enough information to help you make a well-informed decision whether to start go into the business or not.

2.  write a comprehensive business plan.

Your next step is to write a comprehensive business plan. This will serve as a step-by-step guide as you look to get your business off the ground and as you run it effectively after its launch.

Your business plan will include vital information about your virtual data room business, such as your mission and objectives, target market, market analysis and competition, startup and operation costs, projected sales and profit figures for the first few years, marketing strategy, unique selling propositions, sources of funding, management team, and exit strategy.

3. Certain paperwork.

As with any other business, you need to complete certain paperwork when starting a virtual data room business. Register your business with the business registration office in your state. Visit the appropriate local agency to inquire about the licensing requirements for starting a virtual data room business, and obtain all the required licenses and permits.

4. Choosing a good location comes next

Your ideal situation is one with enough space for your equipment and facilities and abundance of utilities required for the smooth running of your business, such as electric power. However, if you are planning to power your virtual data room with solar power or some other alternative, the availability of electricity becomes no longer necessary. After acquiring a good location for your business, set up your offices and data storage infrastructure such as computers, servers, and so on.

5. To build a successful virtual data room business

You will need a team of IT experts to work with you in varying capacities. In fact, the success of your business hinges largely on the skill set and experience of members of your team as well as their level of dedication to their work. So, you need to watch out for these qualities when hiring professionals to work with you.

With all the above steps taken, you can start marketing business through both online and offline methods. Bear in mind that customer satisfaction is key to the success of any business, and a virtual data room is no exception.

• Fundraising

11 Best Virtual Data Room Providers for Startups in 2024

| Written by

In the world of startups, the need for secure, efficient, and accessible data storage is always top of mind. As our businesses grow, so does the volume of sensitive information that needs to be managed and shared with various stakeholders. This is where virtual data room (VDR) providers come into the picture.

In this guide, we’ll dive into the top virtual data room providers that are best suited for startups. We’ll explore their key features, pros and cons, and how they can support your startup’s growth and success.

Our #1 Pick: Systematic

A virtual data room is essential to securely share info with investors, and Systematic offers an intuitive solution to highlight your startup’s potential. Sign up today for over 50% off the first year.

Unsure if Systematic is right for you? Continue reading our comprehensive review below to learn more and explore your options.

Top Virtual Data Rooms for Startups

Virtual data rooms (VDRs) , sometimes referred to as virtual deal rooms, are secure online platforms that allow businesses to store and share sensitive information. They’re equipped with features like encryption, user permissions, tracking access logs, and integration with other tools. These capabilities make VDRs an invaluable asset for startups that need to manage a growing volume of confidential data.

For startups, a VDR is more than just a storage solution; it’s a tool that can facilitate critical business operations. Whether it’s due diligence for a merger or acquisition, fundraising efforts, or board communications, a VDR can streamline these processes by providing a secure, accessible platform for document sharing and collaboration.

But not all virtual data rooms are created equal. The best virtual data room for startups will offer robust security features, user-friendly interfaces, reliable support, customization options, and a solid reputation in the market. It’s also important to consider potential downsides such as costs, technical issues, user errors, and the learning curve associated with new software.

Best Virtual Data Rooms 2024:

Secure Your Startup with Systematic

Protect your sensitive data and streamline fundraising with Systematic’s top-rated virtual data room.

1. Systematic

Systematic has emerged as a dynamic virtual data room solution, focusing primarily on the needs of founders and startups. Recognizing the immense pressure startups face when seeking funding and partnerships, they have crafted a platform that not only offers secure storage and sharing solutions but also provides invaluable tools for the fundraising journey.

• Enables startups to view their profile from investors’ perspective
• Reduces time spent sourcing and pitching to funders
• Provides AI-powered insights for companies to identify strategic opportunities
• The cost associated with leveraging the full suite of features may be a concern for early-stage startups with limited resources
• Some businesses might prefer more traditional virtual data room solutions without the fundraising-centric features

Notable Features

• Unique profile system that improves the visibility of startups to potential investors, increasing chances of securing funds
• Comprehensive interface that offers at-a-glance performance metrics, enabling startups to monitor and manage their business efficiently
• Data room that facilitates smoother interactions and transactions between startups and investors
• The discovery tool, in particular, gives insights into investor perceptions, while the funding tool makes the investment process more transparent and accessible

Overall, Systematic is tailored for startups that are not just looking for a data storage solution but also a platform that understands the challenges of fundraising and offers tools to navigate this crucial phase efficiently.

Boost Investor Visibility with Systematic

We partnered with Systematic to offer TRUiC readers an exclusive discount: over 50% off the first year at just $55 per month.

Firmex is a leading virtual data room provider that offers a secure platform for sharing confidential documents online. With over 20,000 new projects per year and more than 4,200 customers in 110 countries, it’s one of the most widely used VDRs in the world. 

Key features include easy document uploading, automatic indexing, digital rights management, and powerful tools for questions and answers. Firmex also offers strong security protections like encryption, access controls, and compliance with industry standards.

Pricing options include unlimited subscriptions and pay-per-project models, making it affordable for frequent users. Firmex requires you to reach out for a pricing quote.

• Widely used with a strong reputation
• Offers strong security protections
• Provides 24/7 global support
• Flexible pricing options
• Learning curve for new users
• Some users might require some time to adapt to the UI
• Easy document uploading and automatic indexing
• Powerful tools for questions and answers
• Strong security protections like encryption and access controls
• Can be customized and integrated with a company’s systems and workflows

3. Ansarada

Ansarada is a virtual data room that offers a secure platform for organizing documents and streamlining M&A transactions. Their data room allows for efficient document collation in a secure online repository. It offers features like bulk AI redaction of documents, file self-destruct, and AI insights to predict deal outcomes. Their deal workflow tool helps centralize all deal activities in one place for collaboration with teams and advisors. 

Pricing is flexible with simple SaaS plans to suit different needs and budgets, with starter plans (250 MB) ranging from $240 to $399 monthly.

• Offers AI insights to predict deal outcomes
• Provides role-based Q&A and notifications
• 24/7 customer support
• Interface may be complex for some users
• Some features might be unnecessary for smaller deals
• Bulk AI redaction of documents
• File self-destruct feature
• Deal workflow tool for centralized collaboration
• Role-based questions and answer features, as well as robust reporting features

iDeals is a virtual data room solution that facilitates collaboration on business documents for M&A transactions. Deployable in just 15 minutes, the intuitive VDR supports a broad range of devices and file formats, eliminating the need for plugins. Robust security features like encryption, watermarks, and two-factor authentication protect documents on the platform. iDeals has also introduced innovative capabilities such as a secure spreadsheet viewer and activity reports on document views. 

For customer support, 24/7 multilingual assistance is available via live chat, email, and dedicated project managers. Competitive pricing makes iDeals accessible, with pro plans starting at around $460 per month.

• Easy to use with a quick deployment time
• Supports various devices and file formats
• Offers strong security features
• Provides 24/7 customer support
• Pricing may be high for smaller businesses
• Some users may find the interface less intuitive
• Secure spreadsheet viewer
• Activity reports on document views
• Strong encryption, watermarks, and two-factor authentication

5. Datasite

Datasite offers secure solutions for managing financial transactions such as business restructuring, mergers & acquisitions, and capital raising. Their virtual data room platform offers secure file sharing and collaboration within and across organizations. 

In addition to a VDR, Datasite supports advisors and clients throughout the entire deal lifecycle with tools that shorten timelines. Datasite’s AI/ML capabilities and automated redaction tools help streamline due diligence processes, and major companies in various industries like private equity, law, and banking use Datasite’s applications. 

Pricing isn’t directly transparent on the front end, and you’ll need to request a demo to get specific pricing information for your use case.

• User-friendly interface
• Supports clients throughout the entire deal lifecycle
• Used by major companies in various industries
• Meets regulatory compliance standards
• AI/ML capabilities and automated redaction tools
• Secure file sharing and collaboration
• Customizable watermarks

6. Intralinks

Intralinks VDRPro is a virtual data room software that allows the secure sharing of documents for M&A deals and due diligence processes. It offers features like advanced deal preparation, streamlined user invitations, AI redaction, insights dashboards, and video integration with Zoom. 

The platform aims to accelerate deals through automated setup, preconfigured workflows, and insights that identify interested buyers. It provides a highly secure environment for sharing confidential deal documents with granular user permissions and controls. Pricing details are available upon request.

• Offers advanced deal preparation and AI redaction
• Provides an insights dashboard and video integration with Zoom
• Allows for streamlined user invitations
• Highly secure environment for sharing confidential documents
• Pricing details are not readily available
• May have a learning curve for new users
• Automated setup and preconfigured workflows
• Granular user permissions and controls
• Mobile access for anytime, anywhere use

Digify offers secure virtual data room services tailored for startups raising funds. Its platform allows the confidential sharing of documents with prospective investors during fundraising rounds.

Notable startups that have used Digify and successfully raised amounts ranging from $2.5 million to $170 million include Flutterwave, Bolt, Museum of Ice Cream, ThoughtRiver, Lucinity, Antelope DX, and Autify.

Key features like encryption and copy protection give startups control over their sensitive information throughout the fundraising process. Digify provides discounted pricing for early-stage startups under five employees and two years old, with Pro plans starting at $120 per month. And for unlimited data rooms, you can request a custom quote tailored to your business.

• Offers discounts for early-stage startups
• Provides encryption for uploaded documents
• Allows startups to see statistics on file views
• Integrates with Gmail, Outlook, Dropbox, Google Drive and Box
• May not be suitable for larger businesses
• Fewer support options on lower-tier plans
• Mobile apps and mobile-optimized website for on-the-go access
• Ability to track engagement levels at different fundraising stages
• Secure online location for investor due diligence
• Built-in copy protection for files and documents

8. SecureDocs

SecureDocs offers a virtual data room solution for securely storing, managing, and sharing sensitive corporate documents online. It has a simple and intuitive interface and can be set up within 10 minutes with affordable flat fee pricing starting at $250 (annual billing). 

SecureDocs provides valuable insights into activity in the data room through audit reports, alerts, dashboards, and a Q&A function. It prioritizes security and places the customer in control through measures like SOC 2 Type 2 compliance, permission-based access, NDAs, two-factor authentication (2FA), and encryption.

• Offers affordable flat fee pricing starting at $250 with annual billing
• Provides valuable insights into activity in the data room
• Simple and intuitive interface with quick setup
• May not offer as many features as some competitors
• Some users may prefer a more robust and feature-filled interface
• Audit reports, alerts, dashboards, and a Q&A function for insights into data room activity
• 24/7 customer support and 99.9% uptime
• Free due diligence checklist for organizing financial, legal, and business documents
• Company blog posts on M&A, life sciences, IPO trends, and more.

9. Caplinked

CapLinked is a virtual data room provider that offers a secure platform for managing confidential information, mergers and acquisitions activity, due diligence, and contract negotiations. With advanced permission controls, users can upload thousands of protected documents and invite others to collaborate through features like Q&A, versioning, and mobile access.

CapLinked’s virtual data room also boasts world-class security with SSAE16 Type II and ISO 27001 certification and private permission-based workspaces. 

Pricing details are available upon request. Team Plans at Caplinked start at $149 for the first month and $299 per month afterward. 

• High-level security with SSAE16 Type II and ISO 27001 certification
• Advanced permission controls for secure collaboration
• Comprehensive activity tracking for accountability
• Dedicated customer service from technical specialists
• Pricing details are not readily available at the enterprise level
• Secure file sharing with bank-level security and encryption
• Enhanced productivity through easy creation and sharing of virtual data rooms
• Team collaboration features for efficient workflow
• Control over file access even after download

10. FirmRoom

FirmRoom is a virtual data room software that allows users to store, share, and collaborate on confidential documents online securely. It offers features like drag-and-drop uploading, automatic document indexing, advanced search, and new document notifications. 

FirmRoom is praised for its intuitive interface that allows users to set up a data room within minutes and meets high-security standards, being SOC 2 Type 2 certified. Pricing plans (the Standard plan) start at $695/month with unlimited users, 10 GB storage, and one room.

• Intuitive interface for easy setup and use
• High-security standards with SOC 2 Type 2 certification
• Competitive pricing with unlimited users
• Automatic document indexing for easy organization
• Limited storage on the lower-tier plans
• Advanced features may require higher-tier plans
• Drag and drop uploading for easy document management
• Advanced search for efficient document retrieval
• New document notifications to keep users updated
• Resources available for structuring effective online data rooms for M&A transactions

11. ShareFile

ShareFile is a virtual data room provider that offers secure sharing and control of sensitive data for M&A deals and IPOs. It allows automatic transfer and updates of documents between desktops and the online data room. Advanced security features include watermarking, click trails, view-only permissions, and activity monitoring. Pricing for VDRs starts at $375 per month.

• Advanced security features, including watermarking and click trails
• Automatic transfer and updates of documents
• Detailed reports provide insights into document views and user activity
• Granular access controls for customized permissions
• Pricing may be high for startups with limited budgets
• File check-in/check-out feature may not be intuitive for all users
• Dynamic watermarking to deter unauthorized sharing
• File check-in/check-out for efficient document editing
• Q&A section for secure communication
• Email alerts to keep users updated on file views and uploads

Pros and Cons of Virtual Data Rooms

Virtual Data Rooms (VDRs) have revolutionized the way businesses handle sensitive corporate data, especially when compared to traditional data rooms. Here’s a comprehensive look at their advantages and potential drawbacks:

• Cost-Effective: VDRs eliminate the need for physical space rental, document printing, and transportation, leading to significant cost savings compared to physical data rooms.
• Global Accessibility: Virtual data rooms provide the flexibility for stakeholders worldwide to access documents at any time, streamlining the deal management process, especially for global transactions.
• Enhanced Security: VDRs offer advanced security features such as encryption, two-factor authentication, and digital watermarking, providing more robust protection for sensitive corporate data than traditional physical rooms.
• Real-time Collaboration: Multiple users can access and work on documents simultaneously, fostering efficient collaboration and speeding up decision-making.
• Audit Trails: Virtual data rooms automatically track user activity, providing a detailed record of who accessed what and when – which is crucial for accountability and transparency.
• Environmentally Friendly: The digital nature of VDRs reduces paper consumption, making them a more sustainable option.
• Technical Glitches: Like any online platform, VDRs might sometimes face technical issues, potentially hindering the deal management process.
• Learning Curve: Though many virtual data room solutions are user-friendly, new users may need time to familiarize themselves with the platform, potentially causing initial delays.
• Dependence on Internet Connectivity: VDR access relies on stable internet connectivity. Disruptions can inhibit access, making it challenging compared to a physical data room where access is instant in person.
• Potential Over-reliance: Businesses might become overly dependent on a VDR and may not maintain necessary physical backups of crucial documents.
• Costs for Small Businesses: While virtual data room providers are cost-effective in the long run, especially for large deals, smaller businesses or one-time users might find the initial setup and subscription costs relatively high.

While VDRs offer numerous advantages, especially in terms of cost, accessibility, and security, it’s essential to weigh these against potential challenges. When integrated wisely and combined with proper precautions, virtual data rooms can vastly outperform physical data rooms in terms of efficiency and security.

Review Methodology

Ever wondered how we pick and choose which virtual data room providers to include in our list? To sum it up, our methodology to compare virtual data rooms is both comprehensive and meticulous.

We dig into each provider’s offerings, scrutinizing their services and evaluating their performance based on a set of predefined criteria. This ensures that our reviews are unbiased, accurate, and truly helpful for startups. Let’s look into some specific factors we look at and why they’re important. 

We begin by examining the pricing structure of each virtual data room provider. We consider the cost-effectiveness of their plans, the flexibility of their pricing tiers, and whether they offer a free trial or demo. This helps startups understand what they’re getting for their money and whether it’s worth the investment.

Next, we assess the features offered by each virtual data room software. We look at essential functions like encryption, access logs, and integration capabilities. We also consider any unique or standout features that set a provider apart from its competitors.

Ease of Use

We evaluate how user-friendly each VDR platform is. This includes the simplicity of the interface, the intuitiveness of the navigation, and the ease of setting up and managing the virtual data room. A steep learning curve can be a significant barrier for startups, so ease of use is a crucial factor.

Customer Support

We also look at the level of customer support provided. This includes availability (24/7 or business hours), channels of communication (phone, email, live chat) and response times. Good customer support can make a world of difference when dealing with sensitive data.

User Reviews

We take into account user reviews and ratings from various online platforms. These provide real-world insights into the strengths and weaknesses of each VDR provider. User reviews can often highlight issues or benefits that may not be immediately apparent from a provider’s website.

Security is a critical concern when dealing with sensitive business information. We assess each provider’s security measures, including data encryption, user authentication, and access controls. We also consider their compliance with relevant industry standards and regulations.

We evaluate the secure file storage options provided by each online data room. This includes the amount of storage included in each plan, the scalability of storage options, and any restrictions on file types or sizes. Adequate storage space is essential for startups dealing with large volumes of data.

Customization/Flexibility

We look at how customizable and flexible each virtual data room is. This includes the ability to brand the platform, customize user permissions, and adapt the platform to specific business needs. A flexible VDR can grow with a startup and adapt to its changing needs.

Integrations

Finally, we consider the integration capabilities of each VDR. This includes integration with popular business tools and software, such as CRM systems, project management tools, and email platforms. Seamless integration can significantly enhance efficiency and collaboration.

How to Choose the Right Virtual Data Room Software

Choosing the right virtual data room (VDR) solution for your startup or business can be a daunting task, given the plethora of options available. Here are some guidelines to help you make an informed decision:

Understand Your Needs

Consider the size of your business and its potential growth. Will the VDR be able to scale as your business expands? Also, ask yourself: Why do you need a VDR? Do you need it for M&A, fundraising, regular business operations, or something else?

Security is Paramount

Ensure the VDR has robust encryption, multi-factor authentication, and other advanced security measures. Also, look for certifications and compliance with industry standards.

User-Friendliness

A simple and intuitive user interface can save time and reduce the learning curve. Ensure there are tutorials, guides, and customer support to assist with onboarding.

Collaboration Tools

Features like real-time editing, commenting, and Q&A modules can facilitate smoother collaborations.

Customization and Integration

Can the VDR be tailored to your branding and business needs? Additionally, check if it integrates seamlessly with other tools and software your business uses.

Pricing and Plans

Understand the pricing structure. Is it subscription-based, pay-per-use, or one-time? Ensure there are no hidden costs and that the pricing aligns with the features offered.

Track Record and Reviews

Research the VDR provider’s reputation in the industry. Look for customer reviews and testimonials. Consider both the positive and negative feedback.

Opt for a VDR provider that offers 24/7 support, especially if your business operates in multiple time zones. Consider the modes of support – chat, email, phone, etc.

Trial Period or Demo

Before committing, see if the VDR provider offers a free trial or demo. This allows you to test the platform’s functionality and determine if it’s a good fit.

Data Backup and Recovery

Ensure the provider has mechanisms in place for data backup and recovery in case of unforeseen issues or disasters.

Exit Strategy

Understand the process of moving your data out of the VDR, especially if you decide to switch providers or if your project ends.

By evaluating potential virtual data rooms based on these criteria, you can make a choice that aligns with your business needs, ensures security, and offers value for money. Remember, the right VDR can not only streamline operations but also significantly enhance the efficiency and effectiveness of collaborations and transactions.

Virtual Data Room Best Practices

Utilizing a Virtual Data Room (VDR) can be a game-changer for businesses, especially when managing sensitive data and facilitating crucial transactions. However, to get the most out of a VDR and ensure that your data remains secure, it’s vital to follow some best practices:

Clear Data Organization

Structure your data in a logical and hierarchical manner. This not only enhances user experience but also expedites processes like due diligence, where time is of the essence.

Control User Access

Not everyone needs access to all information. Assign permissions carefully, ensuring that users can only access the data relevant to their role or responsibility.

Regularly Monitor Activity

Use the VDR’s tracking and auditing tools to monitor who accesses what data and when. This can act as a deterrent against unauthorized access and help trace any breaches or misuse.

Stay Updated

Ensure that your VDR software is always updated to the latest version. Regular updates often contain security patches and enhancements that protect against emerging threats.

Provide Training

While many virtual data rooms are user-friendly, providing training sessions for users can minimize errors, improve efficiency, and ensure that the platform is used optimally.

Backup Data

While VDRs are secure, it’s prudent to have a backup of all data stored elsewhere, be it another secure cloud solution or physical storage.

Use Watermarking

If your VDR supports it, utilize watermarking for sensitive documents. This can deter unauthorized sharing or reproduction of documents.

Limit Downloading and Printing

For particularly sensitive documents, consider restricting download and print capabilities. This adds an extra layer of control over how data is disseminated.

Plan for the End

When your need for the VDR concludes, whether it’s post-transaction or at the end of a project, have a clear plan for decommissioning the room. This includes ensuring all data is securely backed up and then purged from the VDR and all user accesses are revoked.

Stay Informed

The world of cybersecurity is constantly evolving. Stay informed about new threats and best practices to ensure your VDR remains a secure environment for your data.

By adhering to these best practices, you can maximize the efficiency and security benefits of a virtual data room, making it an invaluable asset in your business operations and transactions.

What is a virtual data room?

A virtual data room (VDR) is an online platform used for storing and sharing sensitive business information in a secure environment. It’s commonly used for due diligence, mergers and acquisitions, fundraising, and board communications. VDRs allow authorized individuals to access documents, collaborate, and communicate while ensuring strong security and access controls.

What is the best virtual data room?

The “best” virtual data room can vary depending on your specific needs. Fortunately, we’ve come up with a list of some of the best VDR providers for startups – take a look at our list above! 

How do I choose a virtual data room?

Choosing a VDR involves evaluating factors like security, ease of use, support, customization, and reputation. Consider your specific needs, such as the volume of data you’ll be handling, the level of security required, and your budget. It’s also beneficial to take advantage of free trials or demos offered by VDR providers.

Can you use Google Drive as a data room?

While Google Drive can be used for storing and sharing documents, it doesn’t offer the same level of security and control as a dedicated VDR. For sensitive business information and transactions, a VDR is typically a safer and more efficient choice.

Is Dropbox a virtual data room?

Dropbox is a secure cloud storage service that can be used for document sharing, but it’s not a dedicated virtual data room. While it has some security features, it lacks the advanced controls and tracking capabilities of a VDR, making it less suitable for handling sensitive business information.

How do I create a virtual data room?

Creating a VDR involves selecting a provider, creating accounts, organizing folders, and assigning user permissions. You’ll need to upload your documents, set up access controls, and ensure that all data is properly encrypted. Most VDR providers offer customer support to assist with setup and ongoing management.

Further Reading

• What Is a Virtual Data Room (VDR)? July 2, 2024
• Due Diligence for Startups July 2, 2024
• 9 Best Equity Management Software for Startups in 2024 July 2, 2024

Topics to Explore

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• Startup Basics
• Startup Leadership
• Startup Marketing
• Startup Funding

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What is a Data Room For Investors

In today's digital age, startups are increasingly turning to data rooms to streamline fundraising and due diligence processes. A data room is a secure online space where startups can store and share sensitive information with potential investors, while also protecting their intellectual property and confidential data.

Data rooms can be a game-changer for startups, providing a secure and efficient way to share sensitive information with investors. In this article, we'll explore what a data room is, why it's important for startups to have data rooms, and how to use them effectively.

What is a Data Room?

A data room is a secure online space where startups can store and share sensitive information with potential investors. It allows founders to share information such as financial statements, business plans, customer lists, intellectual property, and other confidential data with a select group of investors while maintaining control over who has access to the information.

There are two types of data rooms: physical data rooms and virtual data rooms.

• Physical data rooms are physical spaces where investors can review hard copies of confidential documents. This type of data room is less common today due to its high cost and limited accessibility.
• Virtual data rooms (VDRs) are online spaces where investors can access sensitive information securely. VDRs are the preferred option for most startups and investors due to their ease of use, scalability, and lower cost.

Why Do Startups Need a Data Room?

Startups need a data room, for a variety of reasons. A data room is a secure online repository used for storing and sharing sensitive documents and data during due diligence and other business transactions. Here are some reasons why startups should consider using a data room:

• Due Diligence: When startups are seeking investment or acquisition, potential investors or acquirers will want to review the company's financial and legal information. A data room provides a secure and efficient way to share this information with interested parties.
• Secure Document Storage: Startups often deal with sensitive information such as financial records, legal documents, intellectual property, and customer data. A data room provides a secure and centralized location to store and manage these documents.
• Access Control: A data room allows startups to control who has access to their sensitive information. Administrators can set permissions and access levels for different users, ensuring that only authorized parties can view or download specific documents.
• Collaboration: A data room allows multiple users to work on documents and share information in real-time, regardless of their location. This can help startups to collaborate more efficiently with investors, advisors, and other stakeholders.
• Efficiency: Using a data room can streamline the due diligence process and help startups to close deals faster. A well-organized data room can save time and reduce the risk of errors and miscommunications.

Benefits of data rooms for investors

• Increased efficiency: A well-organized data room can save investors time and effort, allowing them to quickly access the information they need to make informed investment decisions.
• Improved security: Data rooms are designed to keep sensitive information secure, providing investors with peace of mind that their data won't be leaked or compromised.
• Better due diligence: Data rooms provide investors with access to comprehensive information, allowing them to conduct more thorough due diligence and make more informed investment decisions.
• Reduced costs: Virtual data rooms eliminate the need for physical storage and document printing, saving investors time and money.

Benefits of data rooms for startups

• Streamlined fundraising process: A data room can help streamline the fundraising process by providing investors with easy access to the information they need to make investment decisions.
• Improved control: Startups can maintain control over who has access to their sensitive information, allowing them to protect their intellectual property and confidential data.
• Increased efficiency: A well-organized data room can save startups time and effort, allowing them to focus on other aspects of their business.
• Improved security: Data rooms provide startups with a secure environment for storing and sharing confidential information, protecting them from data leaks and breaches.

Importance of organizing data for investors

Organizing data is crucial for investors because it allows them to make informed decisions about a company's financial health and future prospects. When investors have access to well-organized data, they can quickly and easily identify key trends, risks, and opportunities that may impact their investment decisions.

An organized data room also helps to build investor confidence and trust by demonstrating that the company takes data security seriously and has implemented appropriate measures to protect sensitive information.

Moreover, having an organized data room can streamline the due diligence process, making it easier for investors to evaluate the company's potential and ultimately decide whether or not to invest. This can save time and resources for both the company and the investors.

Overall, organizing data is a critical aspect of preparing for any investment opportunity and can have a significant impact on the success of a company's fundraising efforts.

How to Set Up a Data Room

• Determine the scope of the data room and what information needs to be included.
• Identify the key stakeholders who will be accessing the data room and set up appropriate user permissions.
• Create a virtual data room using a secure platform that supports collaboration and version control.
• Organize the data into folders and subfolders with clear and concise naming conventions.
• Ensure that all documents are properly indexed and tagged to enable quick and easy search.
• Implement appropriate security measures to protect the data room from unauthorized access, such as password protection and encryption.
• Regularly review and update the data room to ensure that it remains relevant and up-to-date with the latest information.

Best Practices for Using a Data Room

A successful data room can make all the difference when it comes to attracting investors and securing funding for your startup. Here are some best practices to keep in mind:

• Keep the data room organized: Keep your data room organized with a clear folder structure and document naming conventions. This will make it easy for investors to find what they are looking for quickly and efficiently.
• Limit access to confidential information: Only grant access to confidential documents to investors who have signed a non-disclosure agreement (NDA). Make sure the NDA is enforceable in the jurisdictions where your company and investors are based.
• Set expectations for investors: Provide clear instructions to investors on how to navigate the data room and what they can expect to find. This will help prevent confusion and ensure that everyone is on the same page.
• Use analytics to track investor engagement: Use analytics tools to track how often investors access the data room and which documents they view. This can help you gauge investor interest and tailor your follow-up communications accordingly.

Case Study: Real-life example of a successful data room implementation

One example of a startup that successfully used a data room to secure funding is XYZ, a biotech company that develops innovative cancer treatments.

To prepare for their funding round, XYZ created a virtual data room with a leading data room provider. They included key documents such as their financial statements, patents, clinical trial results, and regulatory approvals.

Using the data room, XYZ was able to provide potential investors with a comprehensive view of their business, including the potential of their cancer treatments and their ability to bring them to market.

The data room proved to be a critical tool in securing funding for XYZ. Within a few months of launching the data room, XYZ was able to close a successful funding round and secure the resources they needed to continue their research and development.

Data room is an essential tool for startups seeking to secure funding from investors. By providing investors with secure access to key documents, startups can increase transparency and build trust, ultimately leading to more successful funding rounds.

When setting up a data room, it's important to consider the types of documents to include, the security and accessibility of the data room provider, and the best practices for maintaining a successful data room.

By following these guidelines and leveraging the power of a data room, startups can put their best foot forward and increase their chances of securing the funding they need to succeed.

Written by Michał Kowalewski

Writer and content manager at Capbase. Passionate about startups, tech and multimedia. Based in Warsaw, Poland.

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What is a Data Room?

Physical data room, virtual data room, how virtual data rooms are used.

• Physical Data Rooms vs. Virtual Data Rooms

Additional Resources

A secure place that is used to store privileged data

A data room is a secure place that is used to store privileged data, usually for legal proceedings or mergers and acquisitions transactions. Data rooms are used for storing documents, file sharing, securing sensitive documents, and conducting financial transactions. There are two types of data rooms: physical data rooms and virtual data rooms .

In mergers and acquisitions, the data room is usually set up in the seller’s business premises or office, where the buyers, sellers, and the attorneys handling the transactions can meet to access documents.

The physical data room is also known as a due diligence data room. It is a physical location that is established by the seller to store essential documents that are required during an M&A transaction. The data room is part of the due diligence process; buyers and attorneys representing the buyer can access it before closing the transaction.

The buyer will often need to get as much information as possible about the company being purchased before closing the deal. Therefore, the seller usually stores the required documents in a central location that is continually monitored and secured to limit access to authorized persons only. Often, the seller will allow access for one bidder/buyer at a time, together with their team of experts, as a way to maintain the integrity of the documents.

In large M&A transactions that involve many bidders, sellers will require buyers to fly into the country or region and be available throughout the process. Since the process involves hosting a large number of high-level buyers and experts, the cost of running a physical data room is often high.

To better manage costs, the majority of sellers are moving to virtual data rooms where buyers and their experts can access the documents remotely. A virtual data room is substantially less expensive in terms of time and cost than a physical data room.

A virtual data room is a cloud solution for securing and sharing confidential information. It can facilitate the due diligence process of an M&A deal or venture capital transaction by allowing potential buyers to access the data through a secure internet connection. Virtual data rooms are quickly replacing physical data rooms due to their cost efficiency, ease of accessibility, and security measures.

The standard features of virtual data rooms include a Q&A tool, notes, multi-factor authentication , and advanced permissions. With increasing online security concerns, virtual data room providers are coming up with more sophisticated security improvements to ensure data integrity.

M&A transactions

The most popular use of virtual data rooms is in mergers and acquisition deals. Buyers often need access to large volumes of confidential documents as part of the due diligence process. Many of these documents are confidential in nature and must be stored in a secure place that is accessible to bidders.

Virtual data rooms make it easy for buyers to review and exchange documents without traveling to the seller’s offices. It also makes the review process cheaper since the buyer does not need to handle large paper documents or pay for the travel of multiple experts to scrutinize the documents.

Court proceedings

Court proceedings often involve dealing with large volumes of documents. Some of these documents are highly confidential and may easily get lost or stolen. The use of virtual data rooms allows attorneys, regulators, and other interested parties to access the documents remotely without worrying that the documents will be stolen.

Virtual data rooms also come into play when a case involves international teams working on the same case. The teams can access all required documents from a central place without the need to fly out to access some documents. Where the integrity of these documents is threatened, the issuing party may set the documents as “view only” to limit access.

Initial Public Offering (IPO)

When a company is issuing an IPO , a significant amount of paperwork is involved as attorneys, investment bankers, and other parties are required to sign and verify documents. Storing these documents in a virtual data room ensures the security and integrity of the documents and prevents access by third parties who are not part of the transaction. The company can also ensure competitors do not access these documents by preventing copying, printing, and editing the documents.

Physical Data Rooms vs. Virtual Data Rooms

A large number of companies are transitioning from physical data rooms to virtual data rooms due to the following reasons:

Lower setup and operational costs

Running a virtual data room is often cheaper since the only thing that a company requires is a secure computer system and access to online documents. With a physical data room, the company will need to rent a physical space and hire a security company to keep the room under 24-hour surveillance.

Also, when potential buyers are coming to review the documents, the company will incur an extra cost in paying for their travel, accommodation, and meals. Implementing a virtual data room does away with all the above expenses, so operational costs are lower.

Global accessibility

A virtual data room is hosted on the internet; anybody around the world can access the documents. It gives investors from all over the world access to vital documents that will help them make an informed decision.

Global accessibility also increases competition among buyers, as the company being acquired can benefit from getting a higher price than may be possible when competition is limited to a specific geographical location.

Preservation of documents

Storing documents in a virtual data room ensures that the information is preserved securely for as long as the company wants. The documents are not affected by natural causes like fire and storms, as is the case with physical data rooms.

Maintaining documents in traditional data rooms subjects the documents to wear and tear; the documents will keep piling up to a point when it will be difficult to access documents from previous years.

CFI is the official provider of the global Business Intelligence & Data Analyst (BIDA)®  certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, check out the additional CFI resources below:

• External Analysis
• M&A Considerations and Implications
• Types of Due Diligence
• M&A Glossary
• See all Business Intelligence resources
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17 Best Virtual Data Room Software For Startups [Ranked & Reviewed]

Looking for the best Virtual Data Room (VDR) software for your startup? Look no further! In this blog post, we will rank and review the 13 best Virtual Data Room software programs available.

Virtual Data Rooms are becoming increasingly popular among startups due to their ability to manage and share sensitive data securely. We will evaluate each Virtual Data Room program based on price, features, ease of use, and customer satisfaction. So without further ado, let’s get started!

Our Top 3 Picks And Why

Ideals .

iDeals takes the lead when it comes to the best virtual data room. iDeals aims at integrating workflow into the VDR environment with a customized space, detailed reports, and multiple management tools. iDeals has been tried and tested worldwide by top managers of enterprises, investment bankers, and lawyers.

The most trusted Virtual Data Room provider is Firmex, which provides a smart interface that allows users to work fast and efficiently. Firmex has an expert support team that provides around the clock support. This VDR has a lot of powerful tools used to safeguard important documents and data.

One of the fastest Virtual Data Rooms in the world is SecureDocs. SecureDocs is trusted by many companies irrespective of their size and scale. It just takes 10 minutes to set up a VDR in SecureDocs, and at an affordable price. SecureDocs puts an emphasis on safety, which is why it has a high-level security system in place.

What Is The Best Virtual Data Room?

In this guide, we’ve ranked and reviewed the 11 best virtual data rooms, along with our top 3 picks, so that you can find the virtual data room that works best for you.

Choosing the best virtual data room can be quite difficult, with so many VDR options to choose from. We’ve only covered 11 virtual data rooms.

When choosing the right virtual data room for your startup, it’s best to take the following into consideration:

• Identify Your Needs, Abilities & Desired Features
• Consider Your Budget
• Compare Virtual Data Rooms & Read Reviews
• Test Your Chosen Software by Free-Trial or Demo

We’ll also compare:

• The Best VDR for Small, Medium & Large Businesses
• Pricing Plans, Discounts & Promotions

Top Features

• Industries That Use The Specific VDR

OneHub is a secure virtual data room that stores and shares files for businesses of any size. This VDR offers a robust suite of business tools such as Google Docs integration, branded workspaces, client portals, custom agreements, and automatic watermarking.

OneHub offers a role-based permission structure and bank-level encryption when it comes to data. Most importantly, this VDR provides privacy and security.

• Secure storage and content sharing with AES256 bank-level Encryption.
• Close monitoring of private workspaces in an organized and secure manner.
• Safe software suspension, otherwise known as “hibernation mode”.
• Well-structured organization of files with automatic indexing and easy navigation.

OneHub has four different pricing plans:

• Standard Plan at $12.50 per month

At the basic stage, the Standard Plan is suitable for creating and running a team. The Standard Plan 1 TB of cloud storage, 50 workspaces, and three paid and 200 total users. You can add an additional user for an extra $12.50.

• Advanced Plan at $20 per month

The Advanced Plan allows secure file-sharing online and features unlimited cloud storage, 200 workspaces, five paid and 1000 total users. You can add an additional user for an extra $20. You can request white label features and a custom domain for an additional $100.

• Data Room Edition Plan at $300 per month

The Data Room Edition Plan provides 24/7 customer service support and features unlimited data storage, 200 workspaces, five paid and 1000 total users. As with the Advanced Plan, an additional user costs an extra $20.

• Unlimited Edition Plan at $500 per month

As its name suggests, the Unlimited Edition Plan features an unlimited capacity of cloud storage, workspaces, and users which is why it’s  more expensive  than the Data Room Plan.

Bottom Line

OneHub securely stores, manages, and shares business data. Industries that tend to use this virtual data room include manufacturing, finance, scientific research, accounting, engineering, entertainment, and marketing. OneHub safeguards data against cyber threats using its dynamic security toolkit. Businesses of all sizes can greatly benefit from the use of OneHub. You can try it for yourself with the platform’s 14-day free trial.

Best for:  M&A, Due Diligence , Fundraising and Legal Proceedings

Key Features:  API, 2-Factor Authentication, Google Apps Integration, Multi-User, File Sharing, Notifications, Dashboard, and Password & Access Management

Price:  From $12.50 Up to $500

Annual Discount:  Up to 20%

Promotion:  14-day Free Trial

Overall Geek rank:  ⭐⭐⭐⭐

DocSend enables the sharing, tracking, and managing of sensitive documents in a secure environment. This VDR supports sharing of documents through DocSend links, which eliminates the attachment of bulky documents. Other features include receiving notifications when files are viewed, page-by-page analysis of content performance, and virtual deal rooms.

• Smart permissions management with viewer verification and secure file sync and share.
• Real-time insights dashboard with page-by-page analytics.
• Offers a customizable and user-friendly experience.
• Collaborative abilities that don’t require the download of specific software, and that can be accessed through any device or operating system.

Pricing 

DocSend has four different pricing plans:

• Personal Plan at $10 per month

The Personal Plan provides 10GB of storage and 300 unique monthly visits per user. Large documents up to 500MB can be uploaded. This plan offers integration with Gmail, Outlook, and Dropbox.

• Standard Plan at $45 per month

The Standard Plan provides 50GB of storage and 1000 unique monthly visits per user. Features from the Personal Plan are all included in the Standard Plan as well. This plan offers salesforce integration billed at  $20 per user  on a monthly basis.

• Advanced Plan at $150 per month

The Advanced Plan provides 50GB of storage and custom unique monthly visits. Large documents up to 1GB can be uploaded. Three users are included in the Advanced Plan- if additional users are required,  $90 will be billed extra  on a monthly basis. Features from the Standard Plan are all included in the Advanced Plan as well.

• Enterprise Plan at a custom rate

Features from the Advanced Plan are all included in the Enterprise Plan as well. The Enterprise Plan offers custom training, onboarding, account management, and reporting.

DocSend provides real-time insights, as well as updates and access to documents even after sending them. DocSend is a great option for sales teams, as this platform shows when prospects engage with sales content. The DocSend Spaces feature is a virtual data room solution. A 14-day free trial is available to try it out.

Best for:  Fundraising

Key Features:  Multiple Integrations, Continuous Editing, Customizable Permissions, Tracking History & Notifications, and One Click NDA

Price:  From $10 Per Month

Annual Discount:  Up to 40%

Promotion:  14-Day Free Trial

Overall Geek rank:  ⭐⭐⭐⭐

Box is a secure and easy-to-use virtual data room with file creation, sharing, classification, retention, signature, and co-editing. Box can be integrated with a wide range of services and applications.

• Files are kept safe and secure with AES256 Encryption, single sign-on, and multi-factor authentication.
• Offers a variety of integrations.
• Advanced document features are available, including version control which recovers documents to their former version even after changes are made.
• Three levels of customer support are available: Standard, Premier, and Enhanced.

Box has six different  pricing plans :

• Individual Plan (FREE)

10GB of storage and 250MB file upload limit.

• Personal Pro Plan at $10 per month

100GB of storage and 5GB file upload limit

• Starter Business Plan at $5 per month.

100GB of storage, built-in integrations with G Suite and Office 365, and collaboration of up to 10 users.

• Business Plan at $15 per month

Unlimited storage, same built-in integrations as the Starter Business Plan plus one additional enterprise application, and collaboration across entire organization.

• Business Plus Plan at $25 per month

Unlimited storage and external collaborators, same built-in integrations as the Starter Business Plan plus three additional enterprise applications.

• Enterprise Business Plan at $35 per month

Unlimited storage, external collaborators, and enterprise application integrations.

Box is best for small, medium and large businesses. It offers a solution for any business size and type, providing a collaboration platform that offers both security and scalable content-sharing. Box also offers a 14-day free trial on all of their plans.

Best for:  M&A, IPOs, Fundraising, Litigation and Due Diligence

Key Features:  User & Role Management, File Following & Sharing, and Reporting & Auditing

Price:  Free Plan Available and Paid Plans Starting at $5

Annual Discount:  Up to 25%

Promotion : 14-Day Free Trial

Overall Geek rank:  ⭐⭐⭐⭐⭐

iDeals offers the most comfortable and secure solution in order to achieve a startup’s goals. This virtual data room offers tools such as smart filters, two-step verification, data encryption, and more. iDeals even provides audit trails that boost transparency and accountability.

• Hassle-free and convenient organization of files and uploads.
• Valuable insights and reports are provided.
• Collaboration on documents with multiple users is enabled.
• Up to 8 levels of document permissions can be implemented for privacy and security: fence view, view, download encrypted PDF, print, download PDF, download original, and upload.
• Highly customizable tool with the power to translate data room content into over 90 languages.

iDeal has three different  pricing plans :

• Pro Plan at $460 per month

The Pro Plan features 1 project, 5 administrators, and unlimited users. Flexible storage space of up to 10GB is included.

• Business Plan at a custom rate

The Business Plan features unlimited projects, administrators, and users. Flexible storage space of up to 250GB is included. Features of the Pro Plan are also included.

The Enterprise Plan features unlimited projects, administrators, and users. Flexible storage space of up to 1TB is included. Features of the Business Plan are also included.

iDeals is the most flexible and result-oriented VDR company in the market. It’s best used for small to large projects and provides a 30-day free trial. More than 25 file formats are supported and full control is given to maintain the confidentiality of your data.

Best for:  Due Diligence Processes

Key Features:  Data Import & Export, File Transfer & Sharing, Multi-User & Multi-App, Contact Sharing & Management, 2-Factor Authentication, Analytics, and Batch Permissions & Access

Price:  Starts at $460

Annual Discount:  Not Applicable

Promotion:  30-Day Free Trial

Fordata  

Fordata allows the secure management of confidential communication and documents between transaction parties. With individual file protection and AES256 Encryption, worries about security breaches are a thing of the past with this VDR. Mass operations can be completed with the drag and drop functionality of bulk uploads and downloads in any format.

• Secure data rooms and individual file protection with AES256 Encryption, data compliance, and two-factor authentication.
• Platform is intuitive and easy to navigate with crucial functions.
• 24/7 customer support and mobile-friendly.
• Drag and drop functionality for uploading and downloading in bulk.

Fordata has three pricing plans:

• VDR Lite at €159,20 per month

Includes 1GB of storage and up to 15 users with the possibility of buying extra users.

• VDR Basic at a custom rate

Includes  flexible storage , unlimited users, and 24/7 technical support.

• VDR Pro at a custom rate

Fordata is often used by law firms, advisory companies, investment boutiques, and banks . This VDR solution securely manages communication between transaction parties, confidential documents, and control over users. Fordata has individual file protection and AES256 Encryption to prevent security breaches. A 14-day free trial is available.

Best for:  Sensitive File Sharing for B2B

Key Features:  Access Controls & Permissions, Secure File Viewer, Data Security & Storage Management, and Document Classification

Price:  Starts at €159,20

Annual Discount:  20%

Promotion:  14-Day Free Trial

Dropbox is a virtual data room that’s accessible via the web and in applications that can be installed on both desktop and mobile. No matter which version of Dropbox you’re using, it’s safely secured with AES256 Encryption.

• Cloud-based app offering easy data sharing and storage.
• Deleted files can be recovered for up to 180 days.
• No restrictions on the number of files shared.
• Accessible on different devices.
• AES256 Encryption, SSL, SSO, and active directory.

Dropbox has three different  pricing plans :

Starts at 3 users and 3TB of storage space. Files can be recovered for up to 120 days and Office 365 integration is included.

Features from the Standard Plan are included plus unlimited storage space.

Features from the Advanced Plan are included plus individualized support.

Dropbox allows the secure management and sharing of files across teams and devices. In terms of usability, speed, and performance- Dropbox is the pioneer of virtual data rooms. Dropbox is a reliable solution for collaboration, backing up files, and the use of third-party applications. A 30-day free trial is available.

Best for:  M&A, IPOs and Fundraising

Key Features:  User & Role Management, File Sharing & Storage, Policies & Controls, Device Syncing, and Simultaneous Editing

Price:  From $12.50 per month

Annual Discount:  10% to 15% off

One of the most trusted and popular platforms in the VDR market is Drive Enterprise. It’s affordable, accessible and rich in enterprise-oriented features. Drive Enterprise easily ranks amongst the best cloud storage platforms.

• Dependable and affordable office suite.
• Cloud-based app that provides easy access to files using any device.
• Variety of tools and functionalities for communication and collaboration: Google Calendar, Google Notes, Google Hangouts, Google Docs, Google Sheets, Google Forms, and Google Slides.
• Free 15GB of online storage.
• Offers integration to third-party apps and systems.

Drive Enterprise has four different  pricing plans :

• Business Starter Plan at $6 per month

30GB of storage and 100 participant video meetings.

• Business Standard Plan at $12 per month

2T of storage, 150 participant video meetings and recordings.

• Business Plus Plan at $18 per month

5TB of storage, 250 participant video meetings, recordings, and attendance tracking.

Unlimited amount of storage, 250 participant video meetings, recordings, attendance tracking, in-domain live streaming, and noise cancellation.

One of the best cloud storage solutions available is Drive Enterprise, especially with the number of DMS (document management software) and DLP (data loss prevention)  features it has. Drive Enterprise is an ideal solution for businesses that need a generous amount of storage. As Drive Enterprise is different from the Drive version that Gmail users are familiar with, free trials are available only upon request.

Best for:  M&A, IPOs and Fundraising

Key Features:  Team Collaboration, Advanced Search Features, Access Controls & Permissions, Data Storage Management, and Alerts & Notifications

Price:  Starts at $6 Per Month

Overall Geek rank:  ⭐⭐⭐⭐⭐

FirmRoom  

FirmRoom is a cloud-based VDR that offers a solution for file sharing and document management. This virtual room has several key features, including user activity and data tracking, customized notifications, data analytics and audit trails, as well as individual and bulk uploads and invitations.

• Drag and drop support with bulk uploads and email invites.
• Tracked user activity and advanced notification functions.
• Security and privacy functionalities include audit trails and reports, multiple-factor authentication, single sign-on, view-only permissions, custom watermarks, and no back-end access.
• Intuitive and user-friendly interface.

FirmRoom has three different  pricing plans :

• Standard Plan at $500 per month

The Standard Plan features a single room, unlimited users, 3 free USB archives, and 10GB of storage.

• Pro Plan at $800 per month

The Pro Plan features a single room, unlimited users, 3 free USB archives, and 50GB of storage.

The Enterprise Plan features unlimited rooms and users, and 25GB + of storage.

FirmRoom is designed primarily for the financial sector. This cloud-based virtual data room helps organizations manage acquisitions, mergers, and due diligence through file sharing and document management. A 30-day free trial is available.

Best for:  M&A Professionals

Key Features:  API, Data Import & Export, 2-Factor Authentication, External Integrations, Multi-User, Notifications, and Customer Management.

Price:  Starts at $500

Annual Discount:  Up to 50%

Digify  

Founded in 2011, Digify is a relatively young and user-friendly virtual data room provider. Digify covers small transactions and low-level business needs with functionalities like security presents, revoke access, print and download permissions, access control, and more. Digify can be integrated with Google Drive, Dropbox, and Box. Therefore, the platform comes at an affordable price.

• Powerful capabilities with robust tools and features: dynamic watermarking, cloud storage, email integration, expiry options, terms of access, and access control.
• Fully flexible with numerous customizability options.
• Easy-to-use software that enables effective management and secure sharing of sensitive documentation.

Digify has four different  pricing plans :

• Pro Plan at $99 per month

The Pro Plan includes 1 user, 3 Data Rooms, and 50 Data Room Guests.

• Team Plan at $250 per month

The Team Plan includes 3 users, 10 Data Rooms, and 200 Data Room Guests. Features from the Pro Plan are included.

• Business Plan at $1500 per month

The Business Plan includes 5 users, 25 Data Rooms, and 500 Data Room Guests. Features from the Team Plan are included.

The Enterprise Plan includes multiple users, multiple Data Rooms, and unlimited Data Room Guests. Features from the Business Plan are included.

Digify provides functionalities and features that are appealing to small, medium, and large businesses. The platform can provide unlimited data rooms with one account and offers file tracking, statistics, and document security. Digify also supports the most popular file formats. The Team Plan and Enterprise Plan have a 7-day free trial.

Best for:  Audits, M&A and Due Dilligence

Key Features:  Access Control & Management, Audit Trail, Bulk Uploading, Data Security & Storage Management, and Reporting & Analytics

Price:  Starts at $99 Per Month

Promotion:  14-day free trial

Overall Geek rank:  ⭐⭐⭐⭐⭐ (1 star to 5 stars)

SecureDocs is a secure, affordable, and simple virtual data room that can be used to manage, store, and share sensitive files. This virtual data room is trusted for litigation, bankruptcy, acquisitions, mergers, strategic partnerships, due diligence, and corporate fundraising.

• The platform is comprehensive and can be used for different purposes, including collaborating with external parties.
• User-friendly, drag-and-drop, and intuitive interface.
• Simplified management process with effective user-control.

SecureDocs has three different  pricing plans :

• 3 Month Plan at $400 per month

Unlimited users, data storage, support and training. Billed quarterly. Perfect for short-term projects.

• 12 Month Plan at $250 per month

Unlimited users, data storage, support and training. Billed annually. Preferred option for long-term projects.

• Volume Package at a custom rate

Unlimited users, data storage, support and training. Billed annually. Great option for multiple projects being run simultaneously.

SecureDocs is best for small, medium and large businesses. Free trials are available on their 3-month and 12-month plans. SecureDocs provides features that allow administrators to set up permissions for PDF documents and Office.

Best for:  M&A, IPOs and Raising Venture Capital

Key Features:  Access Controls & Permissions, Data Security & Storage Management, Audit Trail, Secure File Viewer and Document Classification

Price:  From $250 Per Month

Datasite  

Since 1968, Datasite has been providing a safe and user-friendly environment for acquisition and merger specialists. Data site has an intuitive, easy to use, and customizable platform with top notch customer support. The optical character recognition that this VDR offers is useful for making documents searchable.

• Batch-upload files up to 50GB in size.
• Drag-and-drop sorting and uploading.
• One of the best indexing software allows for the staging of content before it’s indexed by the system.
• Stringent security protocols include Privacy Shield, TLS 1.2 Encryption, and AES256 Encryption.
• Scalable and on-the-go management and performance with its SaaS model.

Datasite are  quotation based  and doesn’t have set price plans. Their software is custom priced.

Datasite is the solution for managing financial transactions for medium and large businesses. This virtual data room provides visual analytics and the ability to customize settings for document activity. A free demo is included.

Best for:  Capital Raising and M&A

Key Features:  Access Controls & Permissions, Q&A Management, Reporting & Analytics, Data Security & Storage Management, Audit Trail and Bulk Uploading

Price:  Quotation Based

Promotion:  Free Demo

Since its founding in 2006, Firmex has worked with big companies such as Deloitte, Good Year, and KPMG in its 12 years. The data room marketplace has undoubtedly been driven by Firmex, and it’s no surprise. This VDR streamlines mission-critical and complex processes for both small and big companies alike. Some of the processes include mergers, acquisitions, and financial transactions.

• Clean and easy-to-use interface with intuitive user and group management, DRM, reporting insights, and dashboards.
• Top-level data security used by banks and financial institutions: SOC 2, HIPAA, DRM and GDPR compliant.
• Expert team offering 24/7 support.

Firmex is  quotation based  and doesn’t have set price plans. Their software is custom priced.

Firmex is the solution to complex processes like litigation, compliance, and diligence. It’s mostly used in the corporate and legal industries. Firmex is suitable for small, medium, and large businesses. A free two-week trial is available.

Best for:  M&A, Due Diligence and Compliance

Key Features:  Document Management, User Invitations & Activity, Data Security, an Audit Trails & Reporting

Promotion:  Free Demo

Docully  

Docully provides multi-level security and quality services that are best suited for strategic transactions. This virtual data room has several competitive advantages, including secure messaging, Q&A sectors, advanced administrator rights, and favorable pricing.

• Advanced activity tracking and usage alerts.
• Files are kept safe and secure with AES256 Encryption, SSL connection, two-factor authentication, and customizable watermarks.
• Extended administrator capabilities with granular user access rights.
• Drag-and-drop bulk upload feature.
• 24/7 customer support.

Docully has two different  pricing plans :

• Silver Plan at $100 per month

Includes 1GB of storage and unlimited administrators and users.

• Custom Plan based on customer requirements.

Docully is best used for strategic transactions as it’s a trusted and secure platform. This virtual data room also offers competitive advantages, including user to user platform messaging, advanced Q&A, advanced usage alerts, activity tracking, and limited access to administrative rights. Docully also offers a 15-day free trial with storage of up to 1GB.

Best for:  Strategic Transactions

Key Features:  Access Controls & Permissions, Alerts & Notifications, Activity Tracking, API, Audit Trail & Management, Authentication, and Automatic Backup.

Price:  Starts at $100

Promotion:  15-day free trial

Ansarada is a global SaaS platform that provides AI-powered virtual data rooms and dealmaking tools. They have been trusted by leading brands worldwide, and over $1 trillion USD of deals have been transacted on their platform. The company has protected over 400,000 reputations in more than 180 countries. Their Virtual Data Rooms (VDRs) are designed to facilitate critical business outcomes by providing a secure online space for storing and sharing sensitive information.

• Utilize AI tools to automate processes and provide intelligence on bidder behavior and motives.
• Allows users to self-destruct files regardless of their saved location. 
• Their reports capture every action, providing a detailed audit trail.
• Applies 256-bit encryption and SSL connection to protect data during transmission and storage. 
• Provides a Q&A facility, review and approval workflows, commenting tools, and notifications for enhanced collaboration.

Ansarada offers a flexible pricing structure that is based on the amount of data you need and the duration of your project. It offers free access to all its features.

Ansarada is an ideal choice for managing strategic transactions, offering a secure and trusted platform for businesses of all sizes. Key competitive advantages include AI-powered insights, advanced Q&A, granular access controls, comprehensive activity tracking, and robust security features including remote file self-destruction.

With its commitment to bringing order to organizational chaos, Ansarada is a reliable partner for achieving successful business outcomes.

Best for:  Complex Business Processes such as mergers and acquisitions, IPO, fundraising, bankruptcy and restructuring etc

Key Features:  AI Automation & Insights, Granular Access Controls, Advanced Q&A, Comprehensive Activity Tracking, Robust Security Features, and User-Friendly Interface

Price:  Based on the amount of data you need and the duration of your project. Starts at $399 for 250 Mb monthly.

Annual Discount: Not Applicable

Promotion:  Free access to all Ansarada features. You won’t have to pay until you invite your first external user. No credit card required.

Kiteworks is a platform that provides virtual data rooms designed to expedite stakeholder communications for various sensitive multi-organization processes such as M&A, fundraising, and litigation.

The platform is designed to protect highly confidential content from intentional or inadvertent exposure, with powerful encryption and need-to-know access controls. It is trusted by IT, security, privacy, and compliance leaders at more than 3,800 of the world’s leading enterprises and government agencies.

• Mobile and web interfaces, and plugins for Outlook, Office, G Suite, iManage, and more.
• Utilizes AI algorithms to automatically detect unusual activities, providing intelligent insights on user behavior and potential security risks.
• Ensures compliance with industry and organizational regulations such as SOC 2, HIPAA, GDPR, NIST 800-171, FISMA, and more.
• Bank-grade encryption in transit and at rest, protecting data during transmission and storage. 
• Empowers business leads with instant self-service management of folder provisioning and permissions.

Kiteworks securely manages, stores, and shares sensitive business data. It is widely used across various industries including finance, healthcare, legal, manufacturing, and government agencies.

Businesses of all sizes, from small startups to large enterprises, can greatly benefit from the use of Kiteworks. You can experience the platform’s capabilities firsthand with their quick deployment options and free trials.

Best for:  AI algorithms for detecting unusual activities, granular access controls, seamless Microsoft Office and G Suite editing, comprehensive activity tracking, robust security features including bank-grade encryption, and a user-friendly interface across the web, email, mobile, and enterprise applications

Key Features:  AI algorithms for detecting unusual activities, granular access controls, seamless Microsoft Office and G Suite editing.

Price:  $18 per month per user.

Annual Discount:  15% discount for annual billing

Promotion:  Quick deployment options and free trials are available to experience the platform’s capabilities firsthand.

Sync.com is a secure cloud storage, file sharing, and document collaboration platform. It offers a range of features designed to facilitate seamless collaboration and secure file storage. It was started ten years ago with the goal of creating a secure cloud storage platform designed to protect user privacy.

Today, Sync.com is used by over 2 million teams worldwide, including internal teams, external partners, clients, and customers.

• Create centralized folders that your internal team members and external collaborators can easily access.
• Lets you share your documents through a custom-branded client file portal with your company logo on full display. 
• Backs up your company’s documents in real time, ensuring you can restore any file, any time.
• Includes groundbreaking privacy protection features, enterprise-grade infrastructure, and certification with the most widely accepted security and privacy regulations worldwide. 
• Sync.com provides 180-day to 365-day file history and recovery.

Sync.com offers various pricing plans for teams. Here’s a brief overview:

• Teams Standard:  Priced at $6 per user per month, this plan offers 1 TB of secure storage, advanced sharing features, and an admin account.
• Teams+ Unlimited:  Priced at $15 per user per month, this plan offers unlimited storage, custom branding, admin delegation, and Sync RBAC (Role-Based Access Control).
• Enterprise:  This plan supports businesses who have more than 100 users. To get their pricing you will have to fill their  enterprise form .

Sync.com is an excellent choice for individuals and businesses alike, offering features such as end-to-end encryption, easy file sharing, and a unique “Vault” for unsynced storage. Sync.com is particularly well-suited for backup purposes, with its versioning features allowing users to restore previous versions of files or recover deleted files.

Best for:  Secure cloud storage and file sharing with end-to-end encryption, HIPAA, GDPR, and PIPEDA compliance, and advanced data protection features. Ideal for individuals, teams, and enterprises across various industries.

Key Features:  Real-time backup and sync, access from anywhere, file history and recovery, advanced share controls, granular permissions, two-factor authentication, Office 365 support.

Price:  For teams, the Standard plan costs $6/user/month, and the Teams + Unlimited plan is $15/user/month.

Promotion:  A free trial is available with the starter plan, which includes basic features and never expires. A full money-back guarantee is offered on all premium plans.

Liscio is a comprehensive portal designed specifically for accountants. The platform is designed to break down communication silos and provide a complete picture of each client interaction by Contact and Account.

It provides a unified platform for all client interactions, including email, text messages, client workflows, e-signatures, file storage, document scanning, and more.

• Allows for the request and receipt of large files up to 5GB each, ensuring secure and efficient data transfer.
• Liscio allows you to email, text, and securely message from a single platform.
• Allows you to scan documents directly from phones, with images automatically cropped and converted to PDF.
• Files stored on Liscio can be accessed anytime, anywhere, via a browser or native iOS and Android mobile apps.
• Complies with IRS Publication 4557 and FTC Safeguards Rule, meeting the new IRS and FTC security standards for securing client communication and document exchange.
• Helps keep clients organized with tasks, due dates, and the tools they need to move quickly as well as send automatic weekly reminders via email and mobile notifications to keep clients on track.

Liscio offers one main pricing structure. This plan costs $50 per month per user. The features included in this plan are:

• Secure Messaging
• Email Integration
• Tasks with Automatic Reminders
• eSignatures with KBA (Knowledge-Based Authentication)
• Client Service Teams
• Engagement Letters
• Client Password Storage
• Live Support for Firms AND Clients
• Unlimited Clients

Liscio is an exceptional choice for businesses seeking a secure and efficient communication and collaboration platform. Liscio’s seamless integration with popular apps and accessibility via mobile devices makes it a versatile tool for modern businesses. It offers a unified system that integrates secure messaging, unlimited file sharing, and e-signatures, making it a one-stop solution for professional interactions.

Best for:  It’s ideal for professionals who need to manage sensitive personal and financial data securely.

Key Features:  Secure messaging, email integration, tasks with automatic reminders, eSignatures with KBA, client service teams, engagement letters, client password storage, live support for firms and clients, and unlimited clients.

Price:  $50/user/month

Annual Discount:  $40/user/month when billed annually

Promotion:  Not Applicable

Overall Geek rank:  ⭐⭐⭐

HelpRange is a secure virtual data room that stores and shares files for businesses (small and big). By using HelpRnage you can securely share and store your documents using advanced security controls and valuable insights such as usage statistics, alerts, and visual heat maps in real-time.

• Share only with specific email addresses
• Disallow forwarding
• Track your documents usage
• Prevent screenshot of your documents

HelpRange has one unlimited pricing plan:

• Unlimited Plan $87 per user per month

At the unlimited plan, there is no limit for number of your customers, documents, files, any usage.

HelpRange securely stores, manages, and shares business files and documents. Industries that tend to use this virtual data room include manufacturing, finance, scientific research, accounting, engineering, entertainment, and marketing. HelpRange safeguards files against cyber threats, stealing and unwanted sharing. You can try it for yourself with the platform’s 3-day free trial.

Best for:  M&A, Due Diligence, Fundraising and Legal Proceedings

Key Features:  API, 2-Factor Authentication, Multi-User, File Sharing, Notifications, Dashboard, and Password & Access Management

Price:  From $87/user/month

Promotion:  3-day Free Trial

Frequently Asked Questions

What is a virtual data room.

Virtual data room, otherwise known as VDR, helps businesses share and store sensitive information securely. A VDR can take the form of a secure web application or website that is set up through a proprietary extranet. Businesses can then meet with clients in a virtual room to view sensitive documents to ensure confidentiality. Virtual data rooms are ideal for safeguarding documents and accessing them easily, rather than having to store hard copies in a physical data room.

How Secure Is A Virtual Data Room?

Virtual data rooms comply with strict internal and local data security standards. Multiple layers of security features are implemented in a VDR to provide users with maximum data protection.

Who Can Use Virtual Data Room Software?

Virtual data room software is suitable for businesses and professionals in any industry. Currently, secure data storage is a universal need in the business world. Data Room software presently serves many business sectors, including M&A, Fundraising, IPOs,  Investment Banking, and Law.

What To Look For In A Virtual Data Room?

There are a few essential elements that must be considered when choosing a virtual data room:

• Compliance with data security standards
• Top-notch document security features and data room access
• 24/7 customer support is ideal
• Transparent and reasonable pricing
• Support of common operating systems

In Conclusion

The greatest benefit of virtual data rooms is the security of confidential information. VDRs also provide functionalities that set user permissions and document activity tracking. Documents can also be uploaded in large volumes. Virtual data rooms like Firmex, SecureDocs, Box, and Firmex are all great options for small to large businesses. Datasite is best for medium to large businesses. For unlimited storage, VDRs like iDeals, Box, and SecureDocs are all excellent options. iDeals is a secure VDR provider for all business types and is our best overall pick.

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About the author: Anastasia Nenova

Anastasia Nenova is an experienced content writer from South Africa, specializing in SEO-optimized articles. With five years of experience, she creates high-quality and informative content that is optimized for search engines. Anastasia's expertise in writing and SEO makes her a valuable asset to any content marketing team.

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• Pro Streamlined secure document sharing for small and mid-size projects. Single project + Contact sales for extra projects 5 administrators 10 maximum" data-original-title="business plan for data room" title="business plan for data room">+ 10 maximum Unlimited users Get Price Start 30-day free trial
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Yes, you can use your trial data room for live transactions. There are no restrictions on the data room functionality and you are provided with full customer support during your trial period. Your trial data room can be seamlessly converted to a subscription when you select a plan. There is no need to re-upload any files that have been previously uploaded to your trial data room.

Yes, you can order a fully compliant offline version of your data room on an encrypted USB drive. It usually takes 2 business days to prepare the drive and deliver it to your location, depending on the region.

We accept wire transfers as well as Visa and MasterCard. We accept payments in: Euros British Pounds U.S. Dollars Hong Kong Dollars Australian Dollars

No, you are not obligated to continue using the iDeals Virtual Data Room after the trial.

Yes, you can distribute your storage allotment between any active data rooms you are using.

Yes. Please contact our sales team prior to changing your plan.

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The White House 1600 Pennsylvania Ave NW Washington, DC 20500

FACT SHEET: Protecting America from Connected Vehicle Technology from Countries of   Concern

Chinese automakers are seeking to dominate connected vehicle technologies in the United States and globally, posing new threats to our national security, including through our supply chains. The Biden-Harris Administration is committed to ensuring that our automotive supply chains are resilient and secure from foreign threats.   Today, President Biden is announcing strong action to protect America from the national security risks associated with connected vehicle technologies from countries of concern. The Department of Commerce is issuing a notice of proposed rulemaking (NPRM) that would, if finalized as proposed, prohibit the sale or import of connected vehicles that incorporate certain technology and the import of particular components themselves from countries of concern, specifically the People’s Republic of China (PRC) and Russia.   The announcement is the next step in a process President Biden announced in February, 2024. This NPRM incorporates public feedback submitted in response to the Department’s advance notice of proposed rulemaking (ANPRM) issued on March 1, 2024, which sought public comment on the national security risks associated with certain technologies used in connected vehicles.   Connected vehicles provide many benefits — from promoting vehicle safety to assisting drivers with navigation — but they also pose new and growing threats. These technologies include computer systems that control vehicle movement and collect sensitive driver and passenger data as well as cameras and sensors that enable automated driving systems and record detailed information about American infrastructure. Now more than ever, vehicles are directly connected into our country’s digital networks.   As the Department of Commerce has found, vehicles’ increasing connectivity creates opportunities to collect and exploit sensitive information. Certain hardware and software in connected vehicles enable the capture of information about geographic areas or critical infrastructure, and present opportunities for malicious actors to disrupt the operations of infrastructure or the vehicles themselves. Commerce has determined that certain technologies used in connected vehicles from the PRC and Russia present particularly acute threats. These countries of concern could use critical technologies within our supply chains for surveillance and sabotage to undermine national security.   The Department of Commerce’s proposed rule would prohibit the import or sale of certain connected vehicle systems designed, developed, manufactured, or supplied by entities with a sufficient nexus to the PRC or Russia. Specifically, the rule covers “vehicle connectivity systems” (VCS) — that is, systems and components connecting the vehicle to the outside world, including via Bluetooth, cellular, satellite, and Wi-Fi modules — and “automated driving systems” (ADS), which allow highly autonomous vehicles to operate without a driver behind the wheel. The rule includes restrictions on imports or sales of connected vehicles using VCS and ADS software, as well as imports of VCS hardware equipment. The Department of Commerce is also proposing procedures to let certain parties, such as small producers of vehicles, receive exemptions from the prohibitions on an exceptional basis, in order to minimize unanticipated and unnecessary disruption to industry.   The prohibitions on software would take effect for Model Year 2027, and the prohibitions on hardware would take effect for Model Year 2030, or January 1, 2029 for units without a model year. These restrictions will help address national security risks posed by connected vehicle technologies from countries of concern.   As the Department of Commerce develops the final rule, the Administration encourages interested stakeholders to share input with the Department so that their views can be taken into consideration. The Department will continue to consult closely with industry, U.S. allies and partners, and other stakeholders throughout the regulatory process to ensure any actions maximally protect U.S. national security, while minimizing unintended consequences or disruptions. The Biden-Harris Administration is focused on comprehensively addressing the threats caused by foreign automobiles and supply chains. In May of this year, President Biden directed an increase from 25% to 100% on the tariff rate on Chinese electric vehicles under Section 301. The Inflation Reduction Act tied eligibility for the $7,500 EV tax credit to final assembly in North America and sourcing key battery minerals and components from the United States or trade partners. These prior actions underscore the Administration’s commitment to ensuring that the American auto industry is leading in quality and innovation, and that U.S. automakers have the opportunity to compete on a level playing field as they develop the next generation of automobiles.  

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Southwest Airlines details plans to fight off activist investor Elliott Management

Southwest Airlines is launching a new plan to return the carrier to profitability and has added a new director to its board, amid an ongoing battle with activist investor Elliott Investment Management.

Ahead of Southwest’s investor day Thursday, the Dallas-based airline unveiled a three-year plan to transform its business model. Some of the air carrier’s new initiatives include: assigned seating, premium seating options, boarding changes, global airline partnerships, vacation packages and updates to its rewards program. Just this week, Elliott had announced it would launch a proxy fight “as soon as next week” in an effort to ignite a fire under Southwest leadership ahead of a meeting with shareholders.

“We’re now ushering in a new era at Southwest, moving swiftly and deliberately to transform the company by elevating the customer experience, improving financial performance and driving sustainable shareholder value,” said Bob Jordan, Southwest CEO.

One thing Southwest remains firm on is that bags will still fly free. Many of Southwest’s customers signal that not paying for the first two checked bags is one of the main reasons for frequently flying the airline.

Southwest will also focus on cost savings. Some initiatives include: minimizing hiring, optimizing scheduling efficiency, capitalizing on supply chain opportunities and improving corporate efficiency.

This week, Southwest announced it would cut down on its presence at Hartsfield-Jackson Atlanta International Airport, displacing employees based at the busiest airport in the world based on passenger traffic.

It’s also modernizing its fleet of all Boeing 737 jets with a goal of reaching an average fleet age of five years in 2031.

Another change includes appointing Robert Fornaro, former CEO of Spirit Airlines to the board of directors, an airline executive with four decades of experience. Fornaro was a consultant to Southwest from 2011 to 2014 following its acquisition of AirTran in 2011, and again from 2020 to 2024 following his resignation as president and CEO of Spirit.

The announcement comes after Southwest said seven directors would retire from the board, including executive chairman and longtime leader Gary Kelly. Elliott had pushed for 10 candidates to the board, but Southwest has vocalized it will only consider up to three of its candidates.

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Behind OpenAI’s Audacious Plan to Make A.I. Flow Like Electricity

Sam Altman, OpenAI’s chief executive, is talking to the United Arab Emirates, Asian chipmakers and U.S. officials to expand the computing power needed to build artificial intelligence.

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By Cade Metz and Tripp Mickle

Reporting from San Francisco

Late last year, Sam Altman, the chief executive of OpenAI, started pitching an audacious plan that he hoped would create the computing power his company needed to build more powerful artificial intelligence.

In meetings with investors in the United Arab Emirates, computer chip makers in Asia and officials in Washington, he proposed that they unite on a multitrillion-dollar effort to erect new computer chip factories and data centers across the globe, including in the Middle East. Though some participants and regulators balked at parts of the plan, the talks have continued and expanded into Europe and Canada.

OpenAI’s blueprint for the world’s technology future, which was described to The New York Times by nine people close to the company’s discussions, would create countless data centers providing a global reservoir of computing power dedicated to building the next generation of A.I.

As far-fetched as it may have seemed, Mr. Altman’s campaign showed how in just a few years he has become one of the world’s most influential tech executives, able in a span of weeks to gain an audience with Middle Eastern money, Asian manufacturing giants and top U.S. regulators.

It was also a demonstration of the tech industry’s determination to accelerate the development of a technology it claims could be as transformative as the Industrial Revolution.

When word leaked that Mr. Altman, 39, was looking for trillions of dollars, he was mocked for seeking investments equivalent to roughly a quarter of the annual economic output of the United States. Officials in Washington also expressed concerns that a U.S. company was trying to build vital technology in the Middle East. To build A.I. infrastructure in a number of countries, American companies would need approval from United States officials who oversee export controls.

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