How to Setup a Virtual Data Room: A Beginner’s Guide

If your business doesn’t have a data room already, the reality of the increased digitization of the workplace is that it eventually will have.

Businesses of all sizes are finding that the volume restrictions set by even the most generous email platforms are insufficient for their data requirements. With memory sticks (USB keys) being seen as inadequate from a data safety perspective, the initially gradual movement by businesses toward virtual data rooms has become a stampede.

But before your company joins their ranks, we’ve put together a few easy-to-follow steps which should better prepare you for the transition and setup a data room in 5 easy steps.

In order, we suggest the following steps.

  1. Establish your data storage requirements
  2. Conduct research into which VDR provider best suits your requirements
  3. Draw up your user permissions
  4. Create groups based on project needs and user permissions
  5. Run a trial period between users to ensure smooth usage

1. Establish your data storage requirements

It’s worth investing some time to think through how, when and how often you use data files before looking at subscribing to a VDR service. The two big questions here are: how many users will you require and what kind of data do you estimate that they’ll need to use (and exchange) on an ongoing basis. Answering these questions will inform your search for a VDR provider.

Also remember that one of the big advantages of virtual data rooms is the ability to transfer large files quickly, usually by simply sharing a link with relevant permissions to the data room. If you’re doing this several times a day, you’ll want a VDR that allows you to do this as seamlessly as possible. Although most VDR providers offer a pretty fast service, it’s worth your while at this stage to check some online feedback to see what current users are saying about usability.

2. Conduct research into which VDR provider best suits your requirements and start free trial

Having gone through 1, and worked out if there’s anything particular about your requirements (for example, a business in the creative industry will inevitably have some needs that are different to those of a business in the legal industry), your task is then to look through which virtual data room fulfills those needs at a price that works for you.

This virtual data room comparison is a good place to start, but search as wide and far as you need, and by all needs, avail of the free trials that these providers offer to gain a hands-on impression. While most of the well-known VDR providers are now high quality and reliable in terms of data security, it’s still worth the time doing some research. One seemingly small feature offered by a particular provider could add huge value to your VDR usage.

Here are some useful resources to check:

Run a free trial while choose a data room you like. You can start a trial of FirmRoom here.

3. Draw up your user permissions

Most user guides put this step after you’ve created groups, but we believe it’s best to define the user hierarchy before you’ve even invited any users. On one hand, this allows you to gain a better understanding of how the virtual data room will function at the outset.

On the other hand, it avoids any unnecessary back-and-forth of switching users between groups and hierarchy levels later on. Ultimately, groups tend to be quite fluid, so this isn’t a huge deal - just a small time saving trick that we’ve noticed from setting up groups over time.

4. Create groups based on project needs and user permissions

Having conducted step 3, it should now be a lot easier to see where everybody goes. A good VDR will offer some form of email invite system (usually limited to a certain amount of users per package).

Upon clicking on the link, the users are then brought to the VDR with pre-assigned levels of seniority and already in groups. Aside from the private rooms they’ve been assigned to, there’s also very often a ‘common room’ in the VDR where people can communicate with people of all hierarchy levels.

set permissions

5. Run a trial period between users to ensure smooth usage

While it’s tempting to now feel you’ve finished the process of setting up your VDR, one more step can save a lot of time down the line. We recommend that, instead of uploading all the (sometimes hundreds of) files you’ll need for a project in a fit of enthusiasm, hold back for just fifteen minutes. And now, add two files to your new virtual data room. Just two files.

We want you to:

  • Share the first with just senior members of the group
  • Share the second with everyone.
  • Did the right files arrive to the right people?
  • Now ask everyone to download the files.
  • Ask them to discuss the files within the virtual data room.

You get the message. Take the VDR for a test drive before spending time transferring files onto it. It will save you hours of time later if you take fifteen to twenty minutes to do this now.



While the name misleads some people into picturing a complex expert system, there’s very little to be afraid of with virtual data rooms. They’re designed to be user-friendly, which is why they’ve taken off in just about every industry. If your business is considering investing in a VDR for the first time, follow through the steps above to avoid some of the most common mistakes that we’ve noticed first-time users tend to make.

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