Virtual Data Rooms 101: A Beginner’s Guide

virtual data room explained

Understanding Secure File Sharing for M&A and More

This article is based on an exclusive interview with Chad Brown, Co-Founder of Orangedox, by Software Spotlight host Michael Bernzweig. In the interview, we covered the basics of virtual data rooms (VDRs) – secure online document repositories used in mergers & acquisitions, fundraising, due diligence, and other complex business transactions.

The world of mergers, acquisitions, fundraising, and complex business deals involves sharing sensitive documents between multiple parties. Traditionally, this was handled through inefficient manual processes that risked data leaks. Virtual data rooms (VDRs) solve this problem by providing secure online repositories for storing and sharing documents.

In this beginner's guide to virtual data rooms, we explain VDRs, why secure file sharing is critical for deals, and how Orangedox makes the process incredibly simple.

Virtual data room explained: Secure online document repositories for M&A, fundraising, and complex business transactions.
Learn about virtual data rooms (VDRs) and their role in secure document sharing for mergers, acquisitions, fundraising, and complex business transactions.

What is a Virtual Data Room?

A virtual data room is an online portal that provides controlled access for sharing documents. VDRs allow multiple parties involved in deals and transactions to access, share, and collaborate on business-critical files securely.

Key features of virtual data rooms include:

  • Secure file-sharing capabilities
  • Controlled access permissions
  • Activity tracking – see who accessed files and when
  • Restrictions on downloading, printing, and sharing files
  • Customizable branding

Virtual data rooms provide security, efficiency, and transparency for deals compared to traditional manual document-sharing methods.

Why is Secure File Sharing Important?

The due diligence process for major deals involves sharing highly sensitive documents like financial statements, contracts, strategic plans, and more. This information must stay confidential and controlled.

Without secure file sharing, sensitive data could:

  • Get into the wrong hands
  • Be leaked publicly
  • Provide competitors an unfair advantage

A data breach during a major deal could have catastrophic consequences like:

  • Tanking valuations
  • Violating regulations
  • Derailing the entire deal

Using proper tools for secure file sharing mitigates these massive risks.

Virtual Data Rooms Simplify Sharing

Rather than email attachments or file transfer services, virtual data rooms enable centralized control for sharing sensitive documents.

VDRs make it easy to:

  • Quickly share files with parties that have permission
  • Control who can view, print, or download
  • Revoke access instantly
  • Track detailed activity logs

By streamlining secure file sharing, VDRs reduce risk and friction during complex deals. Parties spend less time coordinating logistics and more time progressing the deal.

Orangedox VDR Benefits

Founded in 2015, Orangedox simplifies secure file sharing with an intuitive virtual data room integrated across popular platforms like Google Drive.

Key advantages of Orangedox VDRs include:

  • Easy Google Drive integration
  • No file uploading needed
  • Mobile friendly interface
  • Detailed activity tracking
  • Custom branding options
  • Affordable pricing

Rather than a separate repository, Orangedox links directly with Google Drive so your existing files are instantly available. Changes sync automatically without needing to re-upload content.

Use Cases for Virtual Data Rooms

Common situations where businesses use VDRs:

  • Mergers & Acquisitions – Smoothly managing due diligence across buyers, sellers, lawyers, bankers and advisors
  • Fundraising – Securely sharing confidential company data with investors for better transparency
  • Board Reporting – Distributing sensitive materials to directors with controlled access
  • IP Licensing – Safely allowing partners to evaluate intellectual property
  • Clinical Trials – Secure collaboration between research teams and pharmaceutical companies

VDRs streamline any use case involving sensitive document sharing between multiple external parties.

Getting Started with Orangedox

Ready to simplify secure file sharing for your next big deal?

Sign up for a free 14-day trial of Orangedox to experience the benefits firsthand.

Listen to our recent Software Spotlight podcast interviews with Chad Brown, serial entrepreneur and Founder of Orangedox, a secure file-sharing and team collaboration platform empowering businesses to work smarter through integrated tracking, access controls, and seamless Google Drive integration.

By understanding the basics of virtual data rooms, you can leverage secure file sharing to simplify your next business deal. Orangedox makes VDRs affordable, intuitive, and integrated across everyday platforms like Google Drive.

Sign up now to experience the benefits yourself with a free trial.


What types of files can you share in a VDR?

VDRs support all standard formats like PDF, Word, Excel, PowerPoint, images, CAD files, and more. You can share anything users need to evaluate for deals.

Can you customize branding and themes?

Yes, Orangedox allows uploading logos, colors, and fonts so the VDR matches your brand identity rather than a third-party tool.

Is content encrypted?

Yes, VDRs use bank-level AES-256 encryption with SSL/TLS protocols for secure transfer and storage, protecting data in transit and at rest.

How much does a VDR cost?

Pricing is based on usage, with Orangedox plans starting at $45/month. More affordable and budget-friendly than traditional VDRs charging large onboarding fees.

Can you track detailed activity?

Yes, Orangedox provides logs showing who viewed and downloaded files and when. Critical for audit trails.

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