We all know the old expression, “You get what you pay for.” Something free may look good but usually ends up being a disappointment. Could a free virtual data room be the exception?
Virtual data rooms have become invaluable for businesses completing complex transactions. They provide a secure space to store sensitive documents and collaborate with other authorized parties. The best ones can speed up legal compliance, auditing, and due diligence processes, helping users close deals faster.
If you’re starting out, we understand the need for a cost-effective VDR solution. But can a free version provide everything you’re looking for? Let’s explore the answer by reviewing five key parameters that will make or break a VDR.
Virtual data rooms exist to provide a secure space for storing sensitive documents. While free file-sharing software like Google Drive and Dropbox are great for personal projects that don’t contain confidential information, they do not provide the security features needed for deals such as mergers and acquisitions. Neither do free online data rooms.
A virtual data room needs the highest levels of security and provides completely secure file-sharing. Otherwise, your business is vulnerable to losing proprietary information or sensitive financial or personal data. Low levels of security make free virtual data rooms unsuitable for many types of transactions.
For example, businesses in regulated industries usually require compliance with GDPR, HIPAA, or SOC 2. It is very unlikely that a free or low-cost virtual data room will provide the level of protection you require.
However, the best virtual data rooms out there offer a free trial. This gives you time to evaluate the platform and decide whether it’s right for your business. Crucially, they also take care of your security needs with:
- Military-grade 256-bit encryption
- Storage on SSAE18-certified and ISO 27001-compliant servers
- Plug-in free technology
You can also rest easy knowing your data is secure because top VDRs offer you outstanding control over your documents–even when they have been downloaded from your system.
Permissions in Free Data Rooms vs Paid Data Room Software
It’s true that some free file-sharing and virtual data room software options allow you to have some control over the documents you share. For example, you can choose whether to restrict them or allow others to edit them. You may even be able to track the changes others have made to your documents.
However, free virtual data rooms do not allow you a high level of digital rights management, such as:
- File encoding: Files have access controls embedded into them. This allows administrators to grant, rescind, and modify access rights to all documents. You can also restrict end-users’ ability to share your document. This means you are always in control and effectively never lose ownership of your confidential information.
- Workspace access: The most sophisticated VDRs have different workspaces, sometimes called vaults, that can only be accessed by authorized individuals. You can grant and rescind access as needed, ensuring people see only what they need to as they complete the transaction process.
- Secure login needed: Users must use secure login protocols, such as two-factor authentication, to access virtual data rooms. Free products offer pared-down security and could allow unauthorized access to your private information.
Customer Support For Free Virtual Data Rooms
If a company is offering a free virtual data room, there is no revenue stream to support a customer support function. There certainly won’t be a call center you can get in touch with for immediate assistance, and email support is likely to be limited or absent. You may get a chatbot, but its support is likely to be limited.
If you’re trying to close a merger, acquisition, or real estate deal, can you afford for your virtual data room to let you down? If you choose a free version, you may face long periods of downtime with no support. This could lead to frustration for your clients and even loss of business opportunities.
With paid VDRs, it is a different story. Not only are dedicated teams of developers working on the VDR to keep it secure and functional, but there are also support services available to assist you. Email support is the most common type of customer service, but some plans may also offer concierge services. They provide dedicated customer success managers to help you get the most out of the VDR.
Scalability
A free VDR may meet your initial needs. Yet, as your business grows, you need a virtual data room that can accommodate more users and ever-increasing amounts of data. While paid VDRs are designed to accommodate businesses as they grow, you are unlikely to find the same level of scalability with free versions.
This means spending a lot of time, and therefore money, on document management to keep within storage limits. Alternatively, you may have to switch to a paid version in the future, which is also time-consuming and expensive.
Free VDR Features vs Paid Virtual Data Room Software
Free VDRs usually have limited features. They are essentially file storage platforms with a few features added. However, you are likely to quickly outgrow their usefulness. You may soon need a VDR that allows for more intuitive collaboration, activity tracking, and more granular user management.
All these features are available in the best paid VDRs. You can collaborate instantly with other users. Questions and answers are saved, providing an audit trail and easy access to information that can inform decision-making.
Claim Your CapLinked Free Trial Today
Sadly, there’s no getting away from the fact that free is rarely best. It would be reckless to entrust sensitive, confidential information to a system that did not have world-class data encryption and comply with international law. Additionally, free software may not offer the tools you need to collaborate effectively and see your project through to its conclusion.
At CapLinked, we have virtual data room solutions tailored to businesses of all sizes. Our Team Plan is ideal for smaller businesses, allowing for up to ten administrators and an unlimited number of guest users. All our clients get a free 14-day trial to see if CapLinked is right for them.
So what have you got to lose? Click here to start your free trial!
