Private equity continues to grow at a staggering rate, particularly after the COVID-19 outbreak. This means that investment management companies must discover new ways to manage the increasing volume of data pertaining to investments they are considering. A virtual data room (“VDR”) is one way to streamline and optimize the due diligence process. Particularly, a virtual data room can be used to assist PE companies conduct a more thorough level of analysis and evaluation of the market position, growth opportunities, cash flows and track records of prospective investment targets.
Utilizing VDRs to conduct a VDR to conduct the initial stage of due diligence can assist investment managing teams close more lucrative deals in a shorter time. In turn, it can make a substantial impact on the bottom line. There are a few specific aspects to take into consideration when choosing the right VDR as part of due diligence for private equity.
First and foremost, the VDR must provide a scalable secure online platform for conducting due diligence on prospective investments. It should let users easily upload documents, manage, and share documents from any device that has an Internet connection. Additionally, a comprehensive due diligence workflow should be included. This should include tools for Q&A, granular control of files and folders, and drag-and-drop capability for uploading files.
In addition, a robust analytics tool should be available to provide a better understanding of processing progress. This should include real time reports on document downloads activities, user activity and Q&A interactions.