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  • Bartłomiej Dmitruk

Virtual Data Room - an effective tool supporting the daily work of PE and VC funds

Virtual Data Room in the work of PE and VC funds is most often associated with the due diligence process when purchasing a company or selling / exiting a portfolio company. There are many more applications for professional VDR like Virtual Data Room SECUDO. Such a tool can be a platform supporting the daily work and decisions of funds. From reporting to investors, through monitoring portfolio companies, to due diligence for the purchase / sale of companies or obtaining financing - the Virtual Data Room can be a platform for confidential communication, monitoring processes and making key decisions in a private equity or venture capital fund.

If you run or work in a private equity or venture capital fund, you likely spend a lot of time communicating and working with investors, portfolio companies, auditors, banks and advisers, which involves managing, organizing and exchanging a lot of confidential information and documents. A professional Virtual Data Room like VDR SECUDO can save your team's time every day while making communication and document sharing with business partners effective, safer and enjoyable.

The implementation of Virtual Data Room SECUDO can help PE / VC funds in four key areas:

1. buy-side due diligence processes;

2. sell-side due diligence processes;

3. ongoing supervision and reporting of portfolio companies;

4. fund raising and communication and reporting to investors.

Use of VDR for due diligence of companies in the purchase process (buy-side DD)

The purchase of a company, especially acquired in the process of building a one-to-one relationship between the fund and the owner, ultimately means a detailed examination of the company before submitting a purchase offer. Such a due diligence process can be meticulously prepared and carried out by the fund using a Virtual Data Room "imposed" by the fund. The process can be prepared "from NDA to SPA", that is, from a confidentiality agreement to a purchase and sale agreement of the target company.

The fund has the option of providing a VDR with a detailed list of issues and documents required for due diligence, guiding the company and owner through the entire process in accordance with their requirements. Virtual Data Room SECUDO gives the possibility of very detailed planning of the entire transaction, its individual stages and the required documents in a way that gives a sense of professionalism and credibility of the fund in the eyes of the company owner - the goal. The process carried out in VDR guarantees security and appropriate confidentiality, increases the effectiveness of activities and ultimately affects the time of the company's research, final decision making and the quality of the purchase offer submitted to the owner of the target company.

Use of VDR for due diligence in the process of selling a portfolio company (sell-side DD)

The sale of a portfolio company of a PE or VC fund is usually an auction process conducted in a professional manner by selected transaction and legal advisors. The portfolio company is prepared for sale by the fund and a team of advisers in order to maximize the selling price. Such a process is most often directed to both strategic investors (competitors or companies for which the purchase of the company - the goal may be of strategic importance) and financial investors (other PE / VC funds that see the potential in the purchase of the company - the goal). Often the fund runs the so-called dual-track, i.e. parallel to the process of selling the company in an M&A transaction, it conducts the sale process through the stock exchange, the so-called IPO, or exit through the public market.

Each of these processes should be prepared in a professional Virtual Data Room, giving the possibility of sharing various documents for strategic and financial investors, analyzing the activity of individual buyers in the process or conducting a dialogue (Q&A) with individual buyers. The IPO process is much more formalized, requires the involvement of many advisors (banks, brokerage houses, auditors, legal advisers, IR / PR advisers) and requires interaction with the regulator (KNF, KDPW, WSE). A professional VDR enables conducting this type of processes in parallel, giving the possibility of effective work of all involved teams on the part of the company, the fund and advisers.

Use of VDR for ongoing monitoring and reporting of portfolio companies

Due to investments in many portfolio companies, funds have a lot of ongoing supervision over the companies they have bought. From the moment of purchase, through the entire investment process and the fund's exit from a given company, the fund monitors the progress of the management board and team work and imposes extensive disclosure obligations on the company.

Reporting and monitoring of companies should be carried out in a way that allows for effective and confidential communication, organization of documents, reports and reports in one place and give the opportunity to conduct projects together with third parties, such as, for example, an auditor, banks or other advisory entities. VDR SECUDO makes it possible to conduct the monitoring and communication process of many companies and projects in one place.

The SECUDO VDR platform can be used as an effective tool for communication, document sharing, monitoring and project management. The fund can have all companies, projects and issues in one place, along with flexibility regarding the companies and projects being run, invited users and access to various scopes of documents or reports. A modern Virtual Data Room is more and more often an extensive work-flow, project management, a durable medium in the form of e.g. blockchain technology or tools such as videoconference, Q&A or collaborative work.

The use of VDR in fund raising as well as communication and reporting to investors

In order to be able to invest in companies, PE and VC funds must raise funds for portfolio investments. Usually, the process of acquiring investors is as absorbing as no more than the investment process and company supervision. Preparation of the so-called fund raisingu (especially the first one) is a critical element in the operation and success of the fund.

Such a process should be carried out in a professional manner and requires (apart from an excellent team and an idea for a fund) appropriate communication tools ensuring confidentiality and effective communication with investors. After collecting the funds, the fund begins ongoing communication with investors, reports the results and presents the valuation and situation of individual portfolio companies.

In this case, the Virtual Data Room SECUDO turns out to be an excellent tool for conducting investor relations of the PE or VC fund. The possibilities and functionalities in the field of creating projects, sharing documents, user authorization and confidential communication perfectly match the requirements for this type of process. A professional VDR should effectively support the process of both fund raising and managing the fund's investor relations in one professionally prepared and properly secured place.

About us

DealDone is a specialized company that offers high-quality products in the field of information and data security. The DealDone team consists of people with many years of international experience in investment banking, investor relations, technology and cybersecurity. We offer services and software in the field of modern technologies for the circulation of confidential information, classified information, sensitive data and digitization, security, encryption and sharing of data and documents inside and outside the organization.

DealDone independently developed and introduced for sale the Virtual Data Room SECUDO solution. VDR SECUDO is a platform for secure exchange and processing of confidential information offered in the Software-as-a-Service model for business clients, in the form of virtual data rooms.

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