Free virtual data rooms: Use or avoid?

When it comes to virtual data rooms (VDRs), the choice of a free option can be tempting, especially for startups and small businesses looking to manage costs.

In 2022, nearly 19 out of 20 firms faced challenges with business finances, with over 80% struggling with increased costs for goods, services, and wages. Additionally, around 58% of small business owners expressed concern about their financial health due to growing operating expenses and uneven cash flows.

Given these pressures, opting for a free data room might seem like a smart way to cut costs. But is a free data room truly the best option for your business, or could it end up costing you more in the long run?

In this article, we’ll explore the available free data room options, weigh the pros and cons, and help you determine whether using a free VDR solution makes sense for your specific business needs — or when it’s better to avoid them altogether:

Contents

• Free virtual data room software: A rundown of the top 7 cloud storage sites you can enjoy for free.
• Pros and cons: Helping you consider the suitability of free VDRs for different business cases.
• Avoiding pitfalls: When it might be wise to steer clear of free or cheap VDRs.
• FAQ: Answers to common questions about using virtual data room software for free.

Free virtual data room options

Let’s start with the analysis of the most popular data room options you can test and use for free.

While free data rooms provide a decent level of data protection and many advanced features for data storage management, they often come with limitations.

If you’re choosing the best free virtual data room software for confidential document sharing, comparing both free and paid cloud storage platforms can help you choose the right product.

Here’s a look at some leading secure data rooms on the market:

VDR solution	Star rating	Market segment	Entry-level price	Ease of use
iDeals	4.7 (426 reviews)	Small-business (54.5%)	✅	9.5
Ansarada	4.6 (151 reviews)	Mid-market (33.8%)	❓	9.2
DocSend	4.6 (508 reviews)	Small-business (79.4%)	✅ From $10	9.0
ShareVault	4.6 (67 reviews)	Small-business (70.3%)	❓	9.0
Clinked	4.8 (102 reviews)	Small-business (71.6%)	✅ from $77.00	9.6
Digify	4.7 (61 reviews)	Small-business (62.3%)	✅ from $120.00	9.5
SecureDocs	4.8 (38 reviews)	Mid-market (52.8%)	✅ from $400	9.5

1. iDeals virtual data room

iDeals is a highly-rated free trial virtual data room known for its intuitive interface, cost-efficiency, and strong customer support. Trusted by over 1 million users globally, including investment bankers, advisors, and real estate professionals, iDeals has consistently ranked as a top product and service in the VDR market. 

iDeals offers some of the most advanced features, including audit logs, bulk file upload, data encryption, access rights management, dynamic watermarking, and granular access controls.

Combined with meaningful analytics, iDeals is a confident choice for secure document sharing among businesses of any size. It offers a free trial to explore its full range of features and a paid version tailored to enterprise and business clients.

2. Ansarada

Unlike other free VDRs, Ansarada offers AI-powered VDR solutions with a focus on long-term client value. Frequently used by investment banking professionals and prospective investors, Ansarada’s platform supports complex deal-making processes, from capital raising to due diligence management, and more. It provides free options with only essential functions, enabling users to explore its features before committing to a subscription.

3. DocSend

Part of the Dropbox family, DocSend allows business professionals to securely share and track documents through a powerful link-based system. It’s particularly popular among small businesses and startups for its ease of use and integration with Google services like Google Drive. A free trial is available, making it accessible for those new to VDRs or with a limited budget.

4. ShareVault

ShareVault provides a secure and organized space for sharing confidential documents and due diligence management, backed by experience in billions of dollars worth of deal transactions. It’s especially favored by small businesses in the biotechnology and pharmaceutical sectors. ShareVault offers a free trial, allowing potential customers to test its capabilities before committing to a full version with advanced features.

5. Clinked

Clinked is a cloud-based data room and collaboration tool that facilitates secure document sharing and project management in a due diligence process. It’s popular among small businesses, particularly in the marketing and advertising sectors. Clinked provides a free trial, enabling users to test its collaborative features and user-friendly interface.

6. Digify

An award-winning cloud-based document security and data storage software, Digify combines data protection, collaboration features, and real-time analytics in one integrated solution. It is well-suited for small businesses and mid-market companies in IT and financial services, and it offers a free trial for users to evaluate its features, which include custom branding, intellectual property management, dynamic watermarking, granular permission settings, password protection, and more.

7. SecureDocs

SecureDocs is known for its simplicity, affordability, and quick setup, providing a secure file-sharing server to store, share, and manage sensitive information. It’s widely used by small to mid-market companies looking for a reliable VDR solution. SecureDocs offers a free trial, allowing users to experience its streamlined deal-making process.

For a broader selection of features and a more in-depth comparison, visit our comprehensive data rooms comparison to find the best fit for your business.

Does it make sense to use free VDR solutions?

The key difference between free and paid virtual data room solutions lies in the breadth and depth of services they provide.

Free VDRs are typically less sophisticated, offering essential data management and collaboration features with some limitations, particularly in secure file sharing. These solutions can be a lifesaver when there’s a limited budget, a need to store large volumes of data or a short-term project that doesn’t require extensive features or long-term support. They’re also ideal for small-scale operations where critical data sharing isn’t involved or for personal use:

Feature	Description
Basic file sharing	Easily upload, share, and download documents with team members or external collaborators.
Document storage	Store a limited amount of data securely in the cloud, often with storage limits.
Version control	Track document changes with basic versioning capabilities.
Basic permissions management	Set basic access rights for users, allowing for simple control over who can view or edit documents.
Integration with other tools	Some free VDRs offer integration with commonly used tools like Google Drive, Dropbox, or Microsoft Office for seamless workflows.
E-signatures	A few free solutions include basic e-signature functionality for signing documents digitally.
Mobile access	Access documents and perform basic tasks from mobile devices.

This explains why free VDR providers are an excellent choice for SMEs, non-profits, freelancers, individual contractors, research and educational institutions, and community organizations. However, they are only suitable when no sensitive or critical business data is being shared with third parties:

Category	Business size	Scale	Budget	Current priorities
Small businesses and startups	Small	Local or regional operations with limited data management needs	Tight budget, focused on minimizing operational costs	Securing a reliable, easy-to-use platform for document sharing and collaboration, especially in early stages of growth
Freelancers and solo entrepreneurs	Very small or individual	Single-person operations with basic document sharing needs	Minimal or no budget for advanced tools	Simple and secure storage solutions, ease of access, basic file sharing without need for advanced security or due diligence
Educational and non-profit organizations	Small to medium-sized	Focused on specific projects or local initiatives	Limited budget, often reliant on donations or grants	Facilitating collaboration, sharing educational materials, managing project documentation without extensive security
Internal team collaboration on non-sensitive projects	Small to medium-sized	Internal projects with minimal external stakeholder involvement	Moderate, with focus on other business areas	Streamlining internal communication and document sharing for non-sensitive materials, no need for advanced security

On the other hand, paid virtual data rooms are designed with a strong emphasis on security and privacy, making them ideal for complex financial transactions and other high-stakes projects. These platforms typically offer full control over file access thanks to in-built redaction, fence view, and granular access controls.

Additionally, most paid VDRs comply with key regulations such as GDPR and HIPAA compliance, ensuring that sensitive data is well-protected.

In summary, free VDRs can be a suitable option for businesses with limited needs, tight budgets, and non-sensitive data. However, as the business grows or the complexity of projects increases, investing in a more robust, paid VDR solution may become necessary.

When it’s better to avoid free or cheap virtual data rooms

If you’re involved in significant transactions — whether in M&A, fundraising, legal proceedings, or other critical business activities — relying on a free or cheap VDR could expose your business to unnecessary risks and operational challenges. That’s because there are a few critical features that are missing in free data room storage solutions:

1. Granular permissions and role-based access control: Managing access to sensitive documents is a critical requirement in any significant deal. Paid VDRs offer granular permissions and role-based access controls, allowing you to precisely determine who can view, edit, or share specific documents. Free VDRs typically offer only basic access settings, which may be inadequate for complex transactions involving multiple stakeholders.
2. Detailed audit trails: In high-stakes business deals, having a detailed audit trail is non-negotiable. This feature allows you to track every interaction within the data room, providing a clear record of who accessed each document, what changes were made, and when these actions occurred. Free VDRs often lack this capability, making it difficult to ensure transparency and accountability.
3. Advanced collaboration tools and integrations: Effective collaboration is essential for the smooth execution of any deal. Paid VDRs offer integrated Q&A sections, secure messaging, and real-time document editing, along with seamless integration with other business tools like CRM systems and project management platforms. Free VDRs typically do not provide these advanced collaboration functionalities, potentially hindering communication and workflow efficiency.

Given these limitations, free VDRs may not be sufficient for managing serious business transactions. To make an informed decision, check out our comprehensive data rooms comparison for a detailed look at the best VDR options available, including their features, security, and pricing.

Conclusion

• Free VDRs may work for simple needs, offering basic file sharing and storage, but they fall short on critical functions like granular permissions, detailed audit trails, and advanced security.
• For high-stakes deals, these limitations can lead to unnecessary risks and inefficiencies.
• Therefore, while free VDRs may suffice for minor projects, investing in a paid solution is advisable for serious business transactions.

FAQ

1. How to set up a free data room?

Setting up a free data room typically involves selecting a platform that offers a free plan, such as Google Drive, Dropbox, or a specific VDR provider with a free tier. After creating an account, you can upload your documents, set permissions for users, and organize your files into folders. However, keep in mind that free data rooms often have limitations in terms of storage, security features, and user management.

2. Can I use Google Drive as a data room?

Yes, Google Drive can be used as a basic data room for document storage and sharing. It offers features like file versioning, sharing permissions, and integration with other Google Workspace tools. However, it lacks advanced security features, detailed audit trails, and the specialized functionality typically required for high-stakes business transactions.

3. What is the app that gives free data?

Several apps offer free data storage and sharing, such as Google Drive, Dropbox, and Koofr. These apps provide limited free storage and basic features, but they may not offer the advanced security and collaboration tools needed for more complex business needs.

4. How do free virtual data room providers compare to paid options?

Free VDRs offer basic functionality, such as document storage, sharing, and basic permissions, but they often lack advanced features like detailed audit trails, granular access control, and robust security measures. Paid options provide more comprehensive tools and are better suited for handling sensitive or complex transactions.

5. Can I upgrade from a free to a paid virtual data room?

Yes, many virtual data room providers offer the option to upgrade from a free version to a paid plan. This allows you to start with basic features and then access more advanced tools and greater storage capacity as your business needs grow.