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Private equity deals involve investing in companies that aren’t publicly traded. Private equity firms seek funds from high-net worth pension funds, individuals, endowments, insurance companies, and other institutional investors in order to invest in privately-held businesses or buy out publicly-listed ones, and then delist them (a process known as leveraged purchase, also known as LBO). Private equity investors want to boost the profits of their portfolio companies to maximize their investment return.

In the sourcing, oversight, and closing of private equity transactions, it is essential for an PE firm to use an online data room that provides professional tools to simplify M&A transactions. These digital environments are secured and provide a variety of services, including granular permissions, advanced security features such as redaction, watermarking, and fence view. Digital environments permit users to upload and store massive amounts of data and create custom workflows to aid in the process of due diligence.

A private equity VDR can also assist in make it easier to raise venture capital from limited partners (LPs). Emerging managers must provide LPs with a comprehensive set of due-diligence materials that show their track record, strategy and traction when pitching them. This will help them determine whether the manager is suitable for their fund, and if it can fulfill its promise to invest in companies with high growth potential.