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Private equity deals are investments in entities which do not have a public listing. Private equity firms collect 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, and then delist them (a process called leveraged purchase, also known as LBO). Private equity investors are trying to increase the profit margins of their portfolio companies to maximize their investment return.

In the process of sourcing, monitoring, and closing of private equity deals, it’s important for an PE firm to use an online data room that provides professional tools to simplify M&A transactions. These digital spaces are bolstered and provide a variety of services that include granular access rights, advanced security features, such as redaction, watermarking and fence view. Users can also organize and upload large volumes of data easily, while creating custom workflows that allow for an efficient due diligence process.

A private equity VDR will also make it easier to streamline the process for raising venture capital (VC) from limited partners. Emerging managers must provide LPs with a complete set of due-diligence materials that show their track record as well as their strategy and traction when pitching them. This can be a great way to aid them in assessing whether or not they’re the best investment for their fund and if they’ll be able to fulfill their promise to invest in high-growth, late-stage companies.