Private equity deals are investments made in entities that do not have a public listing. Private equity firms seek funds from wealthy pension funds, individuals, endowments, insurance providers, and other institutional investors to invest in privately-held businesses or buy out publicly-listed ones, delisting them (a procedure known as a leveraged purchase, or LBO). To achieve the desired returns on investment, private equity investors seek to improve business operations at their portfolio companies to ensure they can boost profits.
It is essential that a PE firm utilizes a virtual dataroom to streamline M&A deals during the sourcing, oversight and closing stages of private equity transactions. These digital environments are secured and offer several services that include granular access rights and advanced security features like redaction, watermarking, or fence view. Users can also organize and upload large amounts of data with ease, as well as developing custom workflows for a more efficient due diligence.
A private equity VDR can also simplify the process of raising venture capital (VC) from limited partners. When pitching potential LPs it is essential for the new managers to offer them an all-in-one solution that includes a complete set of due diligence materials that demonstrate their track record as well as their strategy and traction. This can be a fantastic way to aid them in assessing whether or not they are the best candidate for their fund, and if they’ll be able to keep their promise to invest in high-growth, late-stage businesses.