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7 Best Free Data Rooms in 2023: Should You Pay 0$? (+How to Pick)

Kison Patel
Kison Patel

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.

CEO and Founder of M&A Science and FirmRoom

Secure data storage is one of the most important considerations for startups and established businesses in all industries.

For startups especially, cost efficiency is of the utmost importance to have all of the desired features without overextending your budget.

There are many cost-efficient and free options for virtual data rooms, however, a low-cost provider can end up being more expensive if the data room is not right for your use case.

List of 7 Free (and Low Cost) Data Rooms

  1. FirmRoom
  2. Box
  3. Dotloop
  4. Clinked
  5. Koofr
  6. Ftopia
  7. Dropbox

1. FirmRoom

FirmRoom is a top-ranked virtual data room specifically designed for M&A. All of the essential functions of a virtual data room are featured in FirmRoom, such as drag-and-drop upload, bulk file upload, and specific permissions settings.

There are advanced search capabilities to facilitate document locating, which helps streamline the due diligence process. With FirmRoom, you can also place watermarks on each document and utilize that as a permission setting.

Plus, you can view real-time analytics to see which documents were viewed and how much time was spent on each document.

FirmRoom is fully SEC and FINRA compliant, and places security as their top priority. The platform is also user-friendly and comes with live-chat customer support. 

FirmRoom utilizes flat-rate pricing instead of per-page. Per-page pricing can end up being considerably cheaper for deals that require large amounts of data.

Start your 14-day free trial of FirmRoom data room today.

Firmroom data room

2. Box

Box is a low-cost virtual data room option. Box allows for collaboration between teams, customers, partners, and vendors via the Content Cloud. External program integrations are also possible on the Content Cloud. Box also offers Box Sign, which allows for e-signatures on documents, sales contracts, offer letters, and more.

Workflows can be automated for processes such as HR onboarding and contract management to make work more efficient. Other features include intelligent monitoring, content migration, and an open platform system. While Box will not break the bank, it does lack security features as compared to FirmRoom and other highly ranked virtual data rooms. This may not be the best choice for sensitive business transactions.  

box data room

3. Dotloop

Dotloop is also low cost. Dotloop allows for collaboration, auditing, and data storage management. Dotloop’s platform focuses on the customer experience and makes contract editing, eSigning, sharing, and storing efficient for all parties involved. Dotloop also emphasizes the community component of the platform, they create a network of users on the platform who can collaborate over ideas and answer questions as they may arise.

They also have training webinars and dedicated service teams to address issues. Dotloop also features built-in templates to accelerate workflows, as well as workflow automation options. However, since Dotloop does not offer data protection and due diligence management, it is not the best choice for managing complex mergers and acquisitions. Dotloop’s main target audience is real estate brokers / agents. 

dotloop data room

4. Clinked

Clinked is a low cost virtual data room with key features such as 24/7 customer service, due diligence management, and data protection. They offer a client portal to collaborate, share files, and communicate with clients in real-time. The partner portal is a similar offering, focused on partnering companies rather than clients.

They offer portal customization to match company branding, e-signature capabilities, feedback forms, embedded dashboards that can work functionally with Google Sheets, and app integration. Data protection is done via SSO and password protection for confidential files and folders. Clinked also provides an audit trail including all user activities. However, Clinked does not offer role-based permissions or data storage management. With this in mind, it would not be right for M&A. 

clinked data room

5. Koofr

Koofr is a low-cost virtual data room provider that offers up to 2 GB of free storage. Koofr has the ability to integrate with other cloud storage sites and is also user friendly and perfect for beginners. Users are able to send and receive files via secure, expiring links, or use permissions to share files with other users.

Koofr does not track user activities and protects privacy by encrypting data which is stored in EU-based datacenters. However, Koofr does not offer collaboration features, and does not have features tailored to M&A and due diligence such as audit logs, watermarking, and analytics. Customer support is also largely unavailable. 

koofr data room

6. Ftopia 

Ftopia is an online document sharing service that enables professionals and their teams to create customized private workspaces and to invite customers, suppliers, and employees to share files easily. Ftopia is utilized as a project repository, FTP server, and secure file sharing server. They offer up to 10 users, 3 rooms, and 5 GB for free.

Compared to other free VDRs, they offer the most advanced features, such as custom branding, permissions, collaboration, and auditability. Security offerings include data encryption, intrusion protection, automatic data redundancy, access-rights management, and SAS 70 Type II-certified protection. However, it is not designed specifically for M&A or due diligence. 

ftopia data room

7. Dropbox 

Dropbox is a cloud storage platform for documents, photos, and information. Each user downloads a Dropbox folder on their computer, and the contents of the folder are continuously synced with other users using the network. Files are updated on a live basis, ensuring that the files are up to date in all locations and devices. Dropbox was founded as a cloud storage offering, but has built out other features to make it competitive with data rooms emerging into the market.

Dropbox was one of the first cloud storage platforms, has over half a billion users, and has established a name for itself among personal, commercial, and educational users.

However, Dropbox lacks advanced security features and design for M&A and due diligence, and is best for personal use. To learn more, see our Dropbox vs data room comparison.


What is the Difference Between Virtual Data Room Providers? 

Virtual data room providers differ greatly based on a variety of factors, and free VDR providers have some key differences from paid VDR providers.

Paid VDR providers, such as FirmRoom, include more advanced features in terms of security and tracking in the cost of the data room, while free data rooms do not.

Free VDR providers also lack other features that may be needed in deal management. Customer service is often lacking in free VDR providers; rather than providing 24/7 customer support with an assigned customer service manager, free providers often take a few days to respond to written requests. With paid VDR providers, anytime an issue may arise, there will always be assistance just a click away. 

Some other key differences between the above mentioned virtual data room providers are highlighted below: 

What is the Difference Between Virtual Data Room Providers? 

As previously mentioned, free data rooms cannot be used for transactions or sensitive data handling due to their lack of security features. Free data rooms’ ease of public accessibility can lead to a loss of confidentiality. Free data rooms also have a high probability for breaches. 

Why Do Startups Pick VDR Solutions Such as FirmRoom? 

Ease of Use and Intuitive Interface

Startups can spend less time training every party involved with the deal on how to use the room, upload/download documents, etc. 

Easy-to-use viewer

That searches in documents with custom watermarking to view documents. Documents can be viewed online with a fast, high-quality viewer.

Flat-rate pricing by GB

Avoid astronomical per-page model billing. This is especially important if you upload essential document and file types that are data heavy, such as audio, music, and high res picture. 

Granular, clear permissioning by group

Add permissions down to the document level, as specifically as you prefer. 

File access and distribution

Create meaningful analytics based on the documentation provided, allowing you to see where the most profitable areas of the business are and maximize profitability. 

Document tracking

Advanced analytics allow you to see which documents clients are viewing and the amount of time that they are spending on them. This increases efficiency and enables you to focus on areas of interest. 

Real Time Analytics

Startups can see which investors are reviewing their documents, and the view time length, to better understand engagement levels. 

Secure information sharing

M&A documentation can be instantly shared with prospective investors, advisors, and business partners for collaboration and ease of access.  

Due diligence management

Due diligence requests can go directly through the platform, eliminating the need for Excel trackers and emails and facilitating central storage.  

Why Should You Invest in a Virtual Data Room (and When Not To)

The benefits of using a virtual data room include improved productivity and efficiency, improved workflows for everyday operation and capital raising, information storage, effective communication, project progress tracking, and above all, secure data storage.

data room firmroom

If you need a place to simply store documents, without extra security, Dropbox or Google Drive may suffice. If you make the decision that a virtual data room is right for you, consider all of your needs and look at the whole picture, rather than just cost, when choosing a provider. 

Frequently Asked Questions (FAQs)

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Key takeaways