Making Equity financing deals in Virtual Data Rooms

Lack of own financial resources at a certain stage of the corporation’s life necessitates the attraction of Equity financing. Here is more about the role of the Data Room software in this process. 

The main principles of Equity financing deals

The spread of digital technologies is facilitated by such parallel factors as cheaper access to technologies and their globalization, increased comfort in professional activities, competitive advantages of technologies, and the multiplier effect of their use. Digital transformation also takes place in Private Equity. Implementing a solution to organizing the deal-making process will help to automate and optimize the Equity financing deals. In this case, Virtual Data Room is a perfect alternative. 

Investment activity can be carried out in various forms, taking into account the development of market relations. Attracting external resources – a component in the system of external financing of the corporation, which involves the choice of the instrument of attraction and is based on three interrelated key factors: the price of the instrument, type of liability (equity or borrowed funds), and financing period (long-, medium- or short-term) ). The price of the instrument largely depends on the general state of the capital market and the specific instrument, while the other two factors are universal for all companies in terms of ownership and are divided into equity (equity financing) and debt instruments (borrowed capital).

How to organize an Equity financing deal in the Virtual Data Room?

Equity financing deals become more and more popular online, the number of completed deals is increasing at a rapid pace. Today, investors don’t have to go on time-consuming trips to view the contents of your project. Thanks to the Data Room, the files that characterize the performance of a company are now made available to potential investors online.

Investment banking involves a large number of technical operations and services such as underwriting, merger & acquisition support, financing provision, and many others. Our experts have familiarized themselves with numerous specific aspects of this industry and have adapted the functionality of the data room accordingly. The use of the Virtual Data Rooms has the following advantages:

  • Follow-up activities

Immediately after opening Data Room, you can follow up the indications of interest in the services you offer. Since all files are displayed in real-time and are constantly updated, you will immediately understand in which areas they service is most needed. On the software platform, you can also limit the monitoring with the help of various filters. This way you can find out in which countries or industries your activities arouse interest.

  • Realize versatile evaluation

To understand whether a business or product can bring profit, it is necessary to make a reasonable assessment of the business benefits as well as financial and legal aspects. Data Room gives you this opportunity. It is a centralized platform for reports, compliance documentation, and due diligence reviews. The company that operates the digital Data Room can also change access authorizations at any time and manage them in any way. If you want to attract the attention of investors at the moment, you cannot archive the information about the projects you have implemented, but keep it on the platform for a longer time.

  • Q&A availability

 The parties involved are often interested in asking each other additional questions in case the available documents do not contain all the necessary information. On the Data Room platform, participants can post discussions where they can discuss all aspects of real estate transactions.

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