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Virtual Data Room Costs: How Much Should You Pay in 2023?

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

Overview of Virtual Data Room Pricing 

Virtual data room pricing relies on a variety of factors, including features, purpose, and security.

Some features that determine costs of data rooms are as follows:

Security

Security is a main purpose of data rooms, and one of the most important functions to compare when choosing a data room. Things to look for include data encryption level, watermark capability, secure document storage, authentication technology, security certifications like SOC 2, FINRA and SEC compliance and ability for document recovery. 

Data Management

When selecting a data room, it is important to consider how easy it is to upload and download documents to and from the platform as well as the editing, document indexing and folder structure, and search abilities. 

Project Management

Certain providers offer not just virtual data room features but full lifecycle management capabilities with integrated project management. Platforms like this enable not only data storage, but also streamlined processes and communications, both internally and externally. 

Functionality

Look for a data room with an intuitive, easy-to-use interface with live chat support, email, phone, and other customer service accessibility. Additional features to look for include view-only access, convenient document sharing, granular analytics, easy user management, and simple permissions. 

Analytics

Data rooms should track important information and create meaningful analytics. During transactions, teams need to understand which users and buyers are most engaged and which documents they view the most. VDRs with analytic capabilities can lead to more informed decisions and aid the integration process. 

Software Integrations

Certain providers allow for the integration of other commonly used platforms with their platform, such as Microsoft Office or Slack. This increases functionality and allows teams to get the most out of the data room. 

Purpose

It is important to consider the purpose, the size of the project, number of users, length of the project, etc. and looking for features that will meet your team’s needs. Consider the industry and the size of the project itself when deciding on a VDR.

Pricing type

The various pricing structures include per-page pricing, per-user pricing, storage-size pricing, and a flat-monthly fee. 

What is the Average Data Room Price for Each Pricing Type? 

The varying structures of data rooms determine the pricing of each.

To demonstrate the differences between each, we will use the example of a 3 month project using 50 GB of storage and 15 users. 

Average Data Room Price based on Pricing Type

Per-Page 

Providers generally charge between $0.40 and $0.85 per page. This pricing structure is good for small projects with a clear or set number of documents.

Example project cost: $1900-$5000+

Per-User

This pricing structure provides a set number of user licenses and charges extra for each additional user. The typical cost would be between $100 to $250 per user. This is good for projects with a small number of users. 

Example project cost: $1500-$3750

Storage-Size 

Some VDR providers set a cost structure based on the number of GB the room uses. They allow overages as well that can cost as much as $75 per GB. This is a good pricing option for projects with small text file sizes. 

Example project cost: $1800

Flat-Monthly Fee

Other VDR providers charge flat monthly fees. This pricing structure typically allows for some amount of data, unlimited pages and users, and cost between $400 and $1000 per month. This allows teams to focus on what is best for their project by helping them save money and avoid overage fees. FirmRoom, for example, is $400/month billed annually and includes unlimited users and 10 GB of storage. For $2000, you can get unlimited number of rooms with 25 GB overall storage. 

Example project cost: $800 

The flat rate pricing is overall the best option, as it allows deal teams to worry less about data, user, and time averages and more about what is best for the deal. 

How to Pick the Right Pricing Structure and Save Hundreds of Dollars 

Using a virtual data room with the usual, old-school per-page pricing structure could, as demonstrated above, result in sky high prices, compared to a flat-rate pricing model.

To provide an example, during an investment banking project as described above, the average amount of money saved by using a flat-rate virtual data room is anywhere from $600 to over $4,000.

By choosing a data room with the right price point for your team, not only will it increase the profit made on deals closed but will also limit the amount of money spent. 

Virtual Data Room Providers - How to Make Your Data Room Choice 

Determining which data room is the best fit for your business can be difficult. Here are some steps to consider in the process: 

1. Define your needs and abilities. Consider how much storage is needed, what kind of files and documents will be stored, the budget, which team members will be using the data room, the VDR’s purpose, and whether the use of the data room will impact any workstreams. 

2. Identify desired features. Determine which features will best address the unique goals of your business. Some VDRs are just secure places to store documents, and others contain features that promote collaboration, due diligence, and project management. 

3. Consider the budget. The pricing models of VDRs vary greatly, as discussed throughout this article. A good VDR should not limit the number of users, should have a flat-rate pricing structure, have transparent pricing options without any hidden fees, and provide a minimum of 10GB of storage included in price. 

4. Compare virtual data rooms. Determine which data rooms meet your needs and criteria. See more in this data room providers comparison.

5. Read reviews. Searching “Provider name + Reviews” on Google can provide some helpful search results, pay attention to what reviewers say about the features that correspond to your specific needs. Research the company itself on websites such as G2 and Capterra

6. Select VDR providers, check their sites and talk to support. This will give you an idea of how useful the VDR can be for your industry, how problems will be handled, and have confirmation of the prices and features offered by the VDR. 

7. Test the software with a free trial. The best way to decide on the data room for you is to try it yourself!

Data Room vs. Deal Room: What “Room” Do You Need?

dealroom compared to a data room

A virtual data room is a secure electronic space that stores company documentation and allows for the sharing of information with clients, investors, and a number of other parties in a controlled, secure environment. 

A deal room, on the other hand, is a software with built-in data room but designed specifically for M&A, with a focus on diligence and integration with full project management capabilities.  Deal rooms are built for sharing sensitive documentation, ease of due diligence, and streamlined document management for complex M&A deals. 

To summarize, deal rooms, such as DealRoom, include diligence, pipeline, integration, and document management for the M&A lifecycle. Virtual data rooms, such as FirmRoom, offer secure document storage for a variety of industries. Check out detailed feature comparison here.

Virtual Data Room Price Comparison

Here is a quick overview of data room providers pricing:

dealroom

1. DealRoom

Cost: Starts at $1250/month billed annually 

Free trial: Yes, 14 days.

2. FirmRoom

Cost: Starts at $500/month billed annually 

Free trial: Yes, 30 days. 

intralinks logo

3. Intralinks

Cost: $$$$

Free trial: Per request

ideals logo

4. iDeals 

Cost: $$$

Free trial: Yes.

fordata logo

5. Fordata

Cost:Starts at $190/month billed annually. 

Free trial: Yes.

merrill

6. Merrill

Cost: $$$

Free trial: Yes

securedocs logo

7. Securedocs

Cost: Starts at $400/month billed annually. 

Free trial: Yes.

sharefile logo

8. Sharefile

Cost: Starts at $50/month billed annually.

Free trial: Yes, 7 days. 

box logo

9. Box 

Cost: $$

Free trial: Yes

caplinked logo

10. Caplinked

Cost: Starts at $338/month billed annually. 

Free trial: Yes.

For a detailed overview, see data room providers comparison.

Summary of Features to Look for:

Overall Features

  1. Market Segments 
  2. Drag-and-drop Document Collection 
  3. Watermarking 
  4. Permissions 
  5. Build-in Viewer 
  6. Full-text search

Deal Management

  1. Importable Playbooks 
  2. Due Diligence 
  3. Post-Merger Integration 
  4. Progress Tracking 
  5. Pipeline Management 

Collaboration

  1. Project Management 
  2. In-Platform Communication 

Analytics and Reporting

  1. Audit Logs 
  2. Document Heatmaps 
  3. Diligence Analytics 
  4. Real-Time Activity Reports 

Reviews 

  1. Main Pros 
  2. Main Cons 

Support 

  1. API Access 
  2. Live Chat 
  3. Email, Call Support 
  4. Dedicated Success Manager

So, based on this information, which are the most important factors that go into your decision? 

Comparison of functions and features. Choose a VDR that is efficient, intuitive, and secure that fits your case-by-case needs based on the provider, user, and then project. For the aforementioned IB project, features to look for would be security, collaboration, diligence analytics, and specific permissions among others. 

Comparison of data room pricing and pricing models. After determining the necessary features, then look for which data room offers those while not charging exorbitant amounts of money and allowing for the number of users, storage size, and time frame. Using the previous example of the IB project, you would want to ensure that all 15 users would be able to be a part of the data room, that there would not be overage fees for excess data used over the 10 month span, and that there was availability for 50 GB of data. 

Comparison of industry value. Outside of the function and features offered by the virtual data room provider, some providers offer features and specific capabilities fine tuned to a specific industry. For our example, a deal room would be preferable to a data room, as it offers more specific M&A functions and was designed for deals with a high efficiency rate and a low cost. 

Putting it together

Virtual data rooms can benefit a business in a variety of ways, from improving productivity and efficiency to providing an online platform to not only store information but also communicate, delegate tasks, and track project progress to raising funds from potential investors.

Data rooms also have a wide range of costs, based on pricing structures and available features. With the information in this article, you should be able to find the one that will best suit the needs of your business.

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