Comparison
Data room or shared drive: which one for a deal?
A shared drive is excellent for day-to-day collaboration. For an M&A transaction, it conflates storing and distributing. Here is, without disparaging any tool, what a deal data room does differently.
Point by point
| Criterion | Shared drive | Deal data room |
|---|---|---|
| Making visible | Uploading a file is enough to share it. | Publishing is an explicit decision, after verification. |
| Who sees what | Per-folder permissions, quickly unmanageable on a deal. | Siloed audiences, with a preview of what each group sees. |
| Preparing without showing | Housekeeping happens in front of the guests. | The working file stays internal until opening. |
| Proof of the process | A generic activity history, not built for a closing. | Numbered closing index and exportable audit log of views. |
| Leak deterrence | No watermark on the documents viewed. | Watermark on supported formats and logged access. |
| AI confidentiality | Content may feed the provider's AI features. | No deal file sent to an external AI. |
In short
The drive stays useful to prepare as a team. The day the file opens to third parties, the data room adds what is missing: controlled publishing, siloed audiences, the watermark and usable proof of the process. For the vocabulary, see the glossary; for how it works, the M&A data room guide.
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