Data Room: Everything One Needs to Know in 2021

virtual data room picture

We all know that data is the gold in today’s digital world, and organizations need to leave no stone unturned to protect and store data effectively. Just as we have lockers to keep owned gold safe, there are ‘online data rooms’ wherein one stores the crucial data.

As per MarketsAndMarkets, not just the scope, but the market of data rooms will grow to 3.2 billion by 2026, i.e., double. After all, data rooms can feature many qualities like access control, password protection, and note-taking.

In this post, we will explain what is Data Room, and find out the most dependable names to hire data room services from.

What are the Types of Data Rooms?

Data rooms are of two kinds: physical and virtual data rooms. They differ from each other in deployment, processing, data handling, and at various other fronts. Let’s explain them in detail.

Physical Data Room

Also known as due-diligence data room, a ‘physical data room’ refers to the seller-deployed physical location for crucial document storage. Mostly, businesses store M&A transaction-related documents in this sort of data room.

Physical data room is crucial for the due diligence process as buyer’s attorneys need to access it before or during the transaction closing process. If large M&A transactions are happening, accessing data from a physical data room becomes a tough nut to crack as buyers need to fly to the data room location to access desired documents.

Virtual Data Room

VDRs utilize the cloud computing concept. Virtual data rooms are far cost-effective, easily accessible, and safe ways to store confidential information. It supports the M&A deal or venture capital transaction by allowing the seller/buyer access desired document using an internet connection. As this type of data room is not location-bound, data access becomes more effortless.

Virtual data rooms can be accessed using any data-driven device. Hence, end-users face great flexibility. Technology integration can happen quickly. VDRs have features like Q&A tools, role-based access, and multi-factor authentication to enhance data room security. Speaking of security capability, it’s more than the physical data room. 

Are you running out of time? Catch the essence from this table.


Physical Data Room

Virtual Data Room



Unlimited and can be controlled at each stage.

Virtual data room pricing (Running Cost)

Very high

Less, because resources are by service providers.

Addition of high-end features

Not possible

Easily possible. Features like multi-factor authentication  and Q&A

How is a Data Room Used?

The data room is the spine of an organization as it takes care of what matters the most, the data. Based on the business requirement, the data room can be used in multiple ways.

Data Rooms for M&A transactions

M&A or merger and acquisition is one of the most common application areas for virtual data rooms. In this process, a large volume of data helps maintain the due diligence process efficiently. These documents are highly confidential and need utmost security. Virtual data rooms assist in this greatly. Access controls, documents-sharing with anyone, and permission monitoring on each stage are VDRs few specialties.

Court Processing

Court proceedings involve massive document processing, and virtual data rooms can handle it with utmost perfection. Attorneys, regulators, and other related parties can access desired documents remotely. The international team will be able to access needed data without any restriction.

IPO or Initial Public Offering

An organization issuing IPO has to handle massive paperwork. Storing such documents in a virtual data room gives end-users immediate access to the data and protects them with enough security protocols.

How to Find the Right Data Room Provider? 5 Best Options

Data rooms are the guarding angle for the critical data. But, you’re going to experience all the perks of data rooms only if you choose the right one. Here is how to find out the best Virtual Data Room providers:

  • Make sure that the service provider offers multiple subscriptions to purchase as per the business requirements.
  • Inquire about the security protocols used by the service provider. You can’t risk your data. AES-256 Bit is the best one.
  • The use of multiple security protocols for virtual data rooms grants better security.
  • Features should be flexible, and end-users must be allowed to pick the features as per the need of the hour.
  • A free trial is a cherry on the cake as it allows one to test the real-world utility of the picked data rooms.
  • Easy money-back guarantee grants added metal peace.

Pay attention to all these factors, do your research, and then make a wide choice. Even if you do all this hard work, the odds of making a wrong choice are higher as there are multiple data room services, and each one claims to be the best.

To simplify things for you, we handpicked the top 5 data room providers.

Donnelley Data Room (Venue)

Venue Data room by Donnelley is a solid virtual data room that hardly goes down. It can make you access the data immediately while maintaining various access permission controls for safety. So, you will have full governance on the database. 

This highly secure VDR and data room facility of Donnelley will make M&A data room diligence streamlined. It also improves negotiation and trims down the cost for strategic transactions. In our virtual data room review, we found Venue the best option for you.

Deal Room

The best bet for all sorts of businesses, Deal Room is one of the many dependable virtual room service providers. It offers a 14-day free trial and can work wonderfully for M&A, Corp Dev, Investment Banking, Finance, Tech, and Legal domains. It can handle multiple users.

Firmex Data Room

With the 30-day free trial, Firmex is suitable for everyone. With features like full-text search, permission control, and watermarking, it will win your heart.

Box Data Room

Need to complete due diligence in the least possible hassle? Try Box as this data room M&A offers Q/A. Secure data sharing gives users the required confidence to hand over the data to them.


Starting from due diligence to reporting, SecureDocs can assist you in everything. It’s a suitable electronic data room as it provides real-time analytics reports.


In today’s competitive world, quality data is what makes you win against all the odds. No one can afford to lose or misuse data. This is why one must use the best virtual data room or virtual data room software. About these, you may take data cleanroom services from time to time.

In the article above, I have explained the data room and its significance in detail. The top 5 virtual room providers we listed here deserve your attention as they offer updated features, free trials, and many other facilities. These options are the best data room for investors too.

Related Articles:


What is the difference between cloud storage and a virtual data room?

Cloud storage comes with limited functionality and can be used easily for uploading regular data. Not much security encryption and access control are granted.  In a virtual data room, it’s easier to set complex access protocols and safeguard the data.   Cloud storage is suitable for limited data storage, while virtual data rooms can handle a large amount of data.

How much does a virtual data room cost?
What is a data room for M&A?


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