Data Room Guide: 8 Industry Use Cases for Using Virtual Data Rooms in 2025

What is a Virtual Data Room?

A Virtual Data Room is a secure online platform that allows organizations to share, manage, and track confidential documents during high-stakes transactions. Once reserved mainly for M&A deals, VDRs are now widely used across industries such as finance, legal, healthcare, real estate, and even startups raising capital. 

In this article, we’ll explore how different industries use data rooms, the unique requirements driving their adoption, and how to choose the right VDR for your organization’s needs. If you’re looking to understand more about what a data room is, then we recommend reading more about what virtual data rooms are here.

Top Industry Use Cases for Data Rooms

1. Mergers & Acquisitions (M&A)

The most frequent use case for a data room, M&A transactions demand absolute confidentiality, rigorous organization, and real-time collaboration. During due diligence, buyers, sellers, and advisors must review thousands of documents - from contracts and employee agreements to intellectual property filings.

A Data Room provides a secure repository where the sell-side can upload all relevant materials and control exactly who accesses what. Audit trails record every document view, ensuring full transparency and accountability.

For deal teams, this translates into faster due diligence, reduced risk of data leaks, and simplified compliance. Buyers can easily navigate document categories, leave notes, and request clarifications - all within the same platform.

In short, a VDR eliminates the chaos of email attachments and file-sharing links, replacing them with a centralized, trackable workspace for confidential deal management.

2. Fundraising and Investment Deals

Startups and growing companies use data rooms to manage investor communications during seed, Series A, or later-stage fundraising rounds. A well-organized investor data room can make or break a deal - it shows professionalism, transparency, and readiness and Orangedox excels at helping founders fundraise.

Typical fundraising data room contents include:

1. Pitch decks and financial models
2. Cap tables and shareholder agreements
3. Product documentation and KPIs
4. Market research and go-to-market strategy

With a VDR, founders can control which investors see which documents, revoke access when needed, and track who’s actually reviewing the material. That insight helps gauge investor interest and prioritize follow-ups.

Unlike sending multiple Google Drive links, a VDR like Orangedox integrates seamlessly with Google Drive, allowing you to share and track investor documents without re-uploading or leaving your workspace, perfect for lean startup teams that value both security and simplicity.

We did a separate analysis and research on why secure data management is key for successful fundraising and recommend reading it to understand the challenges that Orangedox tackles.

3. Legal Document Management

Law firms and legal departments deal with sensitive information daily. Client contracts, litigation evidence, intellectual property filings, and compliance documents. Managing and sharing these securely is critical for maintaining confidentiality and client trust.

Virtual Data Rooms help legal teams:

1. Safely store and organize case files
2. Control document access on a per-user or per-group basis
3. Enable version tracking and audit logs for compliance
4. Collaborate efficiently across multiple firms or jurisdictions

VDRs also reduce risk during discovery or contract negotiation phases, ensuring that only authorized users can view, download, or share documents.

For firms with frequent cross-border cases or corporate clients, adopting a secure VDR is now standard practice, it demonstrates a commitment to data governance and client confidentiality.

4. Real Estate Transactions

Real estate firms, brokers, and investors rely on data rooms to manage property sales, lease agreements, and investment portfolios. 

In these transactions, multiple parties such as buyers, sellers, lawyers, and lenders need access to zoning documents, inspection reports, environmental assessments, and title deeds. A VDR streamlines the process by providing:

1. Centralized document storage
2. Access control for different stakeholders
3. Version control for updated reports or offers
4. Audit logs for compliance and accountability

For example, during a large commercial property sale, the seller can upload all documentation once and share secure access with each potential buyer, ensuring confidentiality and eliminating repetitive file exchanges.

The result: faster transactions, fewer administrative errors, and improved client satisfaction.

Looking to understand how buyers, investors or partners interact with your property documents? Learn more about how you can do that by checking out Orangedox’s data rooms for real estate.

5. IPOs and Financial Reporting

When preparing for an Initial Public Offering (IPO) or other major financial disclosure, companies must manage a complex flow of documents between underwriters, auditors, and regulatory bodies.

A Virtual Data Room simplifies this process by enabling secure, version-controlled document sharing, ensuring that all parties work from the most up-to-date information.

Typical IPO data room contents include:

1. Financial statements and audit reports
2. Corporate governance records
3. Legal disclosures
4. Risk assessments

Beyond IPOs, many public companies use VDRs for quarterly financial reporting and board communications. The ability to track document views and maintain full audit trails ensures that sensitive information never leaves authorized hands.

6. Strategic Partnerships and Joint Ventures

When two or more companies collaborate on a new venture or strategic alliance, sensitive data often needs to be shared, such as product designs, technology roadmaps, or market research.

In these cases, a VDR provides a secure collaboration space where both parties can exchange documents, negotiate terms, and manage joint projects without compromising proprietary information.

Key benefits include:

1. Data segregation between teams or departments
2. Time-limited access for external partners
3. Real-time analytics on document engagement

By maintaining transparency while protecting intellectual property, VDRs allow organizations to collaborate confidently, essential in industries like technology, manufacturing, or energy where innovation and confidentiality go hand in hand.

7. Life Sciences and Healthcare

Life sciences companies, from biotech startups to pharmaceutical giants handle massive volumes of clinical, regulatory, and intellectual property data. Security and compliance requirements (HIPAA, GDPR, FDA) make these industries prime adopters of VDR technology.

Common uses include:

1. Sharing clinical trial results with regulators
2. Managing drug licensing or patent documentation
3. Partnering with research institutions
4. Facilitating mergers, acquisitions, or licensing deals

A VDR helps these organizations ensure that only authorized researchers, regulators, and partners access sensitive materials. Audit logs and permissions management help maintain compliance and integrity throughout the research lifecycle.

In a field where a single data breach could compromise years of R&D, virtual data rooms provide the necessary balance of security and accessibility.

8. Corporate Restructuring and Bankruptcy

Corporate restructuring, bankruptcy, or liquidation processes involve complex information exchanges among creditors, investors, auditors, and legal teams.

A Virtual Data Room serves as the central repository for all financial statements, creditor claims, restructuring proposals, and court filings. It ensures that every party has real-time access to relevant documentation while maintaining confidentiality over sensitive company data.

Because these situations are often time-sensitive, the ability to set up and share documents quickly, while retaining visibility into who accessed what, helps streamline negotiations and compliance efforts.

VDRs also simplify audit preparation and regulator interactions by providing verifiable records of all document activity.

Choosing the Right Virtual Data Room for Your Industry

Not all data rooms are created equal, and choosing the right one depends heavily on your industry’s workflows, data sensitivity, and collaboration style.

When evaluating a Virtual Data Room provider, consider the following key factors:

1. Ease of Use: A clean, intuitive interface reduces training time and speeds up adoption, especially important for teams working with external partners or investors.
2. Security Features: Look for encryption, granular permission controls, watermarks, and NDA gating to ensure that documents are protected at every level.
3. Document Tracking and Analytics: Real-time analytics can reveal who viewed your files, for how long, and which sections they focused on, insights that are invaluable during due diligence or fundraising.
4. Integration with Existing Tools: Seamless integration with platforms like Google Workspace, Google Drive or Dropbox minimizes workflow friction and avoids constant re-uploads.
5. Scalability and Pricing: Choose a VDR that scales with your business, from a few investor documents to large-scale M&A or compliance projects. Transparent, per-admin pricing is often more predictable than per-page or per-project billing models.

At Orangedox, we designed our data room solution with these principles in mind, combining enterprise-grade security with Google Drive integration and full document tracking. This allows businesses of all sizes to share confidential documents securely while keeping everything within their familiar workspace.

Whether you’re a startup raising capital or an enterprise managing compliance workflows, the right virtual data room can turn document sharing from a bottleneck into a strategic advantage.

Final Thoughts

Virtual Data Rooms have evolved from niche tools for investment bankers to indispensable platforms across virtually every industry. As organizations increasingly prioritize security, transparency, and control, adopting a VDR is no longer optional, but essential.

From M&A to fundraising, from real estate to healthcare, every sector benefits from a centralized, trackable, and secure way to manage confidential documents.

And as integrations with tools like Google Drive become the norm, platforms like Orangedox make it easier than ever to bring secure document sharing into your daily workflow without adding extra steps.

Frequently Asked Questions

1. Are Virtual Data Rooms legally compliant and secure?

Yes. Modern Virtual Data Rooms like Orangedox comply with leading data protection standards such as GDPR, CASA, and HIPAA. They also offer encryption, access controls, and audit trails to keep sensitive information fully secure.

2. Can I track who views documents in a data room?

Absolutely. Orangedox provides real-time document tracking, showing who viewed each file, and which sections they focused on. This insight helps identify active investors or stakeholders and ensures complete transparency.

3. What documents should I include in a data room?

That depends on your use case:

1. M&A or Fundraising: financial statements, investor decks, term sheets, and cap tables.
2. Legal or Real Estate: contracts, licenses, or property records.
3. Healthcare or Life Sciences: clinical results and regulatory filings.
4. In every case, the goal is to make due diligence or collaboration faster and more secure.

4. Can I integrate a data room with Google Drive or Dropbox?

Yes, Orangedox integrates directly with Google Drive and Google Workspace, allowing you to share and track files without ever re-uploading them which is ideal for lean startup or M&A teams.

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Start your 14-day free trial of Orangedox Virtual Data Rooms and see what Orangedox can do for your business, or you can book a free 1-1 demo today.