How to Set Up a Virtual Data Room for Financial Transactions?

We have set the task of ensuring that the management is motivated during the transaction so that they continue to work with the same level of return by setting up VDR for financial transactions.

Virtual data room for Fintech Business

The most successful deal organizers make sure that their M&A strategy is at the center of their fintech business. This allows you to gain a clear understanding of the strategic components of any potential deal. Increasingly, companies have to critically assess both their business model and their operating model to ensure they can stand the test of time given the pace of disruptive change. Our findings reflect a significant need to improve due diligence in many of the areas that form the basis of the operating model. For example, due diligence procedures need to be improved in terms of technical aspects and patterns of use of intellectual property, tax operating model, and the core business of the target.

In other words, the most successful buyers are those who do a lot of big, comprehensive work before the deal is made. In fact, more than two-thirds of the companies whose transactions subsequently yielded significant purchase price benefits already had an integration strategy for the purchased asset already in place at the time of signing.

Financial transactions allow companies to expand and diversify their businesses, but our research supports a finding that buyers are reluctant to admit: many transactions do not create value. Slightly more than half of the buying firms analyzed have performed worse than the industry average in the two years since their last deal closed on TSR. To close deals and maximize value, companies need to consider all aspects of their value creation plan and incorporate this into a long-term strategy, backed up by a track record of successful deal-making.

Accordingly, in order for the financial transaction to be truly successful, it is necessary to start focusing on creating value much earlier than it is now customary in most cases. The same goes for sellers: if companies considering a deal have already strategically planned the disposition of assets and analyzed their portfolios, then their deal is likely to be successful, as opposed to those companies looking for immediate profit.

The Way of Setting Up Virtual Data Room for Financial Transactions

An integral part of successful financial transactions is setting up a virtual data room. Financial transactions that have sold assets and generate value in those deals pay a lot of attention to planning, due diligence, and following a clear methodology. A comprehensive check of the alienated asset by the seller allows revealing the full potential of the business and the vector for its future development. This analysis also helps the seller prepare for any questions the buyer may have and promptly eliminate potential problems in order to eliminate surprises, the likelihood of missing the “right moment” or succumbing to competitive pressure in the transaction process.

The procedure of setting up a virtual data room is quite simple:

  1. Choose the most suitable for your VDR provider.
  2. Make groups and add a necessary amount of users to them.
  3. Check and set the permissions.
  4. Download files and documents. 

Another area where significant improvements are possible is in the selection of priorities. According to the results of our research, 30% of organizations have identified rebranding as a priority since the closing of the deal – a task that, as the overwhelming majority subsequently recognized, should not have been a priority.