StowbillWhat is a virtual data room?
A virtual data room (VDR) is a secure online space for storing and sharing confidential documents during a transaction. It replaced the physical rooms where buyers once read paper files under supervision. This guide explains how deal teams use one, which features matter, and how it differs from an ordinary shared drive.
A short definition
A virtual data room is a controlled document repository. The owner decides who can see each document, what they can do with it, and for how long, and every action is logged. Data rooms are used in M&A, due diligence, fundraising, restructuring, debt and sukuk issues, and audits.
When deal teams use one
| Situation | What goes in the room |
|---|---|
| Sell-side M&A | Corporate, financial, legal, commercial and HR documents for bidders |
| Buy-side due diligence | The target's documents and the advisers' workstream files |
| Fundraising | Pitch deck, model, cap table, key contracts |
| Restructuring | Lender papers, forecasts, creditor correspondence |
| Post-deal | Completion bible, portfolio reporting |
Features that matter
- Granular permissions by person, group and folder.
- Access that can expire on a set date.
- Version control, so everyone works from the current document.
- An audit trail of who viewed, downloaded or shared each file.
- Bulk upload, a clear index and export at the end of the deal.
- For outside parties: watermarking, view-only access, NDA acceptance and a Q&A workflow.
- Strong security: encryption, two-step login and malware scanning.
How Stowbill approaches the data room
Stowbill puts the data room inside the engagement, so the mandate stages, documents, sign-offs, time and invoices live together. Today it offers folders with six inherited permission levels, expiring shares, version history, a 30-day recycle bin, upload checks, ZIP download, client uploads without an account and an append-only activity log with Excel export. Outside parties sign in with emailed one-time links, accept an NDA, view PDFs in a watermarked view-only viewer, ask questions in private Q&A, and appear in per-party reports. The index is numbered 1, 1.1, 1.1.1 for everyone and exports to Excel. PDFs can be redacted, and Excel and Word files open in a protected view. SSO and page-level analytics are not built yet.
How much a data room costs
Prices range from around $100 a month for simple flat-rate rooms to tens of thousands of dollars for enterprise per-project rooms (approximate third-party figures, November 2026). Our pricing guide compares the models in detail.
Questions
What is a data room used for?
Mainly for sharing confidential documents in transactions: M&A, due diligence, fundraising, restructuring and debt issues. It controls who sees what and records every action.
Is a data room the same as cloud storage?
No. Cloud storage is built for everyday sharing. A data room adds granular permissions, expiry, version control and a full audit trail designed for confidential deals.
What does VDR stand for?
Virtual data room.
Who sets up the data room?
Usually the sell-side adviser or the company raising money, with input from lawyers and accountants on the index.
What should be in a due diligence data room?
Corporate, financial, tax, legal, commercial, HR and IP documents, organised by a numbered index. Our free due diligence checklist gives a starting structure.
Last reviewed 10 November 2026. General information, not professional or legal advice.
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