Raising money or going through an investment deal is never simple. There’s always a pile of documents to prepare, long email threads to manage, and sensitive data that needs to be shared safely. Because of that, many companies are now choosing virtual data rooms to stay in control and avoid risks.
In fact, a 2023 report by PwC found that close to 70% of dealmakers use secure digital tools when handling confidential documents during fundraising or acquisitions. That number keeps growing, which shows how important these platforms have become.
Virtual data rooms make it easier to keep files organized, limit access, and speed up the whole process. Whether it’s a startup presenting to investors or a larger company involved in a merger, having a secure digital space changes how deals get done.
What a virtual data room does
A virtual data room serves as a safe digital storage system that allows organizations to handle document sharing and storage. The online version of a secure locked filing cabinet exists as a smart system that provides easy accessibility.
These rooms aren’t just about keeping files safe. They’re designed to organize documents clearly, track who views what, and give users different levels of access. That way, people only see what they’re supposed to, and the company stays in control of its data.
Why data rooms make sense for deals
Sharing business documents through email or generic cloud storage comes with risks. Files get lost, sent to the wrong person, or accessed without permission. A data room solves these problems by offering structure and security.
Here’s why they’ve become a go-to tool:
Better security
Everything inside a virtual data room is protected. Files are encrypted, watermarked, and access can be limited to specific users.
Faster collaboration
Organizations have the ability to upload their entire collection of documents into a single upload. All files remain located in one central place where users can efficiently find and handle them.
Clear control
Admins can see who opened which file, when, and for how long. That makes the process more transparent and helps avoid confusion.
Anywhere access
Because data rooms are online, team members and investors can log in from wherever they are, no matter the time zone.
Why investors and startups use virtual data rooms
During fundraising, startups often need to share financials, legal agreements, and strategy decks with investors. Using a virtual data room keeps everything secure and well-organized.
Investors appreciate having one place to look through everything. Instead of chasing down emails or waiting for attachments, they log into the dataroom and review what they need.
At the same time, companies stay in control of the process. They decide who sees what and can remove access at any time. That’s especially useful when sharing documents with several potential investors.
This is why virtual data rooms have become essential in the early stages of raising capital. They help both sides move faster, avoid mistakes, and build trust more quickly.
Features that make a difference
Not all data room providers offer the same tools, but the best ones share some helpful features:
- Simple uploading, even for large batches of files
- Permission settings to control who can see, print, or download files
- Full activity logs showing who has viewed each document
- Folder systems to keep everything neatly organized
- Q&A tools to let users ask questions directly inside the platform
These features make things run smoother and cut down on delays.
How data room providers differ
When looking for the best virtual data room, the provider matters. Some focus on big deals like mergers and acquisitions. Others are built for small businesses or legal teams. Picking the right fit depends on what the company needs.
Important things to think about include:
- How secure is the platform
- How easy it is to use
- Whether it supports team collaboration
- What customer support is available
- How the pricing works
A strong provider makes the whole process easier, not harder.
Best data room providers right now
Several virtual data room providers stand out in 2025. Some of the best-known include:
- iDeals — offers great user control and strong security
- Intralinks — good for complex, international deals
- Datasite — has smart features for managing M&A documents
- Firmex — popular for legal and accounting firms
- DealRoom — designed specifically for the M&A process
The platforms present distinct advantages and features to the market. Businesses need to dedicate time to trial different platforms before selecting the solution that suits their project needs.
Conclusion
Deals involve a lot of moving parts. People need to work quickly, stay organized, and protect their information. Virtual data rooms give companies a way to do all of that in one place.
Teams can devote less time to document management when they use the proper platform since it enables better relationship building and deal-closing performance. In the current speedy business ecosystem, organizations benefit substantially from this capability.