As more and more business is conducted online, one of the things that also has been begun to be done virtually is deal-making. In the past, businesses would travel, often to the office of the other business they are making a deal with, to hammer out the specifics of a deal. Now that business travel is extremely diminished, companies that are looking to conduct deals remotely have found that they need certain digital tolls to expedite and secure the deal-making process.
An excellent tool for this is a virtual deal room. This digital tools can work for many different types of deals, but one of the best use cases for them is the merger and acquisition process. This process is often very inefficient, and requires companies to combine their assets in a way that makes sense for both business owners and stakeholders. Typically, this results in protracted negotiations, a mountain of paperwork, and can sometimes take months or even years depending on the complexity of the merger or acquisition.
The great thing about a virtual deal room is it helps to expedite this process and make it more efficient, all while allowing the deal to be conducted remotely. With a virtual deal room, business owners and stakeholders will have continual access to the documents that they need to review in an easily accessible location.
But what exactly is a virtual deal room?
Understanding what a virtual deal room can do for you and what is actually is are two different things. A virtual deal room, which is often referred to as a deal room, is a cloud-based software solution that allows you to store documents securely and communicate with another party directly within the platform. As a communication platform, a deal room offers unparalleled communication capabilities, including the ability to track changes within documents such as contracts and direct commenting on areas of contention within the contract. During the merger and acquisitions process, which is highly sensitive by nature, it is important to be able to openly communicate and easily refer to any documentation on any issues that may arise.
Virtual deal rooms also offer excellent security functionality, including multiple layers of encryption and the ability to set user-based permissions on the documents it stores. This can allow you to hide documents for lower-level employees who may need to be involved in the merger and acquisition process in a supporting capacity, but ultimately not as a key negotiator or main player. This makes for a more collaborative but also more secure environment to conduct business deals remotely.
Why should you invest in a virtual deal room?
While understanding what a virtual deal room does is great, it is also important to understand why you may want to invest in one. For one, negotiating a deal entirely remotely is difficult, and there is plenty of back and forth that is required. Knowing that you have a place where this collaboration can be tracked and referred to at any point will help to expedite the deal-making process, and there are always certain hang-ups that need to be addressed when it comes to mergers and acquisitions. With a deal room at your disposal, you can more easily pinpoint these issues and cut down what could be a month’s long process into a single month or several weeks.
As well as the collaborative element, the security apparatus of a virtual deal room is unparalleled. With cybersecurity becoming a bigger and bigger issue due to the rise of the COVID-19 pandemic, it is more important than ever that big deals like a merger or acquisitions are done in a safe and secure manner. Not only can a virtual deal room help to encrypt files, but the multi-factor authentication protocol to access the deal room in the first place can keep even the most persistent hackers at bay.
Overall, a deal room is an excellent way to conduct multiple types of deals, but is particularly important to have during a merger and acquisition. Not only can it help expedite the deal and encourage collaboration, but it can also make the deal more secure from potential hackers and cybercriminals. This makes it an invaluable software solution that all companies should consider who are looking to perform a merger or acquisition remotely.