Enterprise data rooms cost $15,000-50,000+ per deal, but most startups only need features available for $0-100/month. Learn how to avoid overpaying and choose the right VDR for your fundraise.
Every week, I talk to founders who just paid $15,000+ for a data room to raise their seed round. When I ask what features they needed, the answer is almost always the same: "I don't know, our lawyer recommended it."
Here's the uncomfortable truth: most startups don't need enterprise data rooms. They're paying for features designed for billion-dollar M&A transactions when all they need is secure document sharing with basic analytics.
Let me explain why this happens and how to avoid the trap.
Traditional virtual data room providers like Intralinks, Datasite, and iDeals were built for a different world—one where $50 million M&A transactions were the primary use case and per-deal pricing made sense because deals closed quickly and clients passed costs through.
Here's what enterprise VDR pricing typically looks like:
| Pricing Model | Typical Cost | Best For |
|---|---|---|
| Per-page | $0.50-$2.00 per page | Large document volumes |
| Per-user | $50-300/user/month | Known user counts |
| Flat project fee | $5,000-50,000+ | Complex M&A deals |
| Storage-based | $500-2,000/GB | Data-heavy transactions |
For a typical seed round with 50-100 pages of documents shared with 20-30 investors, the math doesn't work in your favor.
Lawyers and advisors often recommend what they know—and they know enterprise VDRs because that's what their larger clients use. The recommendation isn't wrong for those clients, but it's overkill for a $2M seed round.
Founders worry that investors will judge them for not using a "proper" data room. In reality, VCs care about:
They don't care whether you're using Intralinks or Papermark—they care whether the experience is professional.
The VDR market has changed dramatically in the last few years. Modern alternatives offer enterprise-grade security at startup-friendly prices. But if you only Google "best data room for fundraising," you'll find content marketing from enterprise providers, not honest comparisons.
Let's separate must-haves from nice-to-haves for a typical startup raise:
View Tracking: Know who opened your deck and how long they spent on each page. This is non-negotiable for managing your investor pipeline.
Email Capture: Require email before viewing so you know exactly who has your materials.
Link Controls: Set expiration dates, disable downloads, and revoke access when needed.
Document Updates: Update your deck once and have all shared links reflect the changes automatically.
Basic Security: Password protection, encryption, and secure hosting are table stakes.
Q&A Workflows: Useful for complex due diligence, but overkill for seed rounds.
OCR/Full-Text Search: Valuable when you have thousands of documents, unnecessary for 50 pages.
Redaction Tools: Enterprise feature for M&A, not needed for investor decks.
24/7 Phone Support: You're unlikely to need live support at 3 AM for your fundraise.
Let's do the math for a typical seed round:
Enterprise VDR
Modern Alternative (Papermark, similar)
That's potentially $15,000+ in savings that could go toward product development, hiring, or extending your runway.
To be fair, enterprise VDRs earn their premium in specific situations:
Large M&A Transactions: When you're selling a company for $100M+, the VDR cost is noise, and the features (Q&A management, complex permissions, dedicated support) genuinely add value.
Institutional Requirements: Some PE firms and strategic acquirers specify particular VDR providers. If your buyer requires Intralinks, you use Intralinks.
Complex Multi-Party Deals: When you have 50+ buyer groups with different permission levels and thousands of documents, enterprise workflow features justify the cost.
Highly Regulated Industries: Healthcare M&A, government contracting, and financial services deals may require specific certifications or features.
Use free tiers from modern providers. You need:
Recommended: Papermark free tier, DocSend free tier
Upgrade to paid plans for:
Recommended: Papermark Pro, Dealroom starter plans
Consider enterprise options when:
Recommended: Evaluate iDeals, Datasite, Intralinks based on specific needs
What's the total cost for my expected timeline? Get quotes that include all fees, not just monthly rates.
Do I need features beyond document sharing and tracking? Be honest about what you'll actually use.
What do my investors actually expect? Ask founders who recently raised—most will tell you VCs don't care about the platform.
Can I start free and upgrade later? Don't lock into annual contracts for uncertain timelines.
What happens to my data after the raise? Understand retention policies and export options.
Enterprise data rooms are excellent products designed for enterprise use cases. But if you're a startup raising a seed or Series A round, you're probably paying for features you'll never use.
Modern alternatives like Papermark offer the security, tracking, and professional presentation investors expect—at a price that makes sense for your stage.
Don't let outdated advice and enterprise marketing convince you to spend $15,000 on something you could get for $79/month.
Your runway matters. Spend it on what moves your company forward.