Private equity deals are those that involve investments in companies that aren’t publicly traded. Private equity firms raise funds from wealthy pension funds, individuals, endowments, insurance providers and other institutional investors in order to invest in privately-owned businesses or buy publicly-listed ones, then delisting them (a process known as the leveraged purchase or LBO). Private equity investors are looking to boost the profits of their portfolio companies in order to maximize their investment return.
It is vital that a PE firm uses a virtual dataroom in order to streamline M&A deals during the sourcing, oversight, and closing stages of private equity transactions. These digital environments that are secure offer several services, including granular access permissions and advanced security features like redaction, watermarking and fence view. They also allow users to manage and upload large amounts of data with ease, as well as creating custom workflows for a more efficient due diligence.
A private equity VDR will also streamline the process for raising venture capital (VC) from limited partners. Emerging managers must provide LPs with a comprehensive set of due-diligence materials that showcase their track record in terms of strategy, traction and results when pitching them. This can be a fantastic way to aid them in assessing whether they’re the ideal match for their fund and if they will be able to deliver on their promise of investing in late-stage, high-growth companies.