How to Structure a Virtual Data Room for M&A Transactions

Filing cabinets and other paper-based processes have quickly become antiquated methods of storing and sharing information, with digital file storage now the norm. But with potential M&A buyers located halfway across the planet, how can you ensure that all parties can view the documents they need without the risk of a devastating data breach?

Virtual data rooms are secure online repositories for sharing and storing confidential files, such as documents needed for an M&A transaction. By enabling document sharing while placing appropriate restrictions on user access, VDRs facilitate the M&A due diligence process.

For maximum efficacy, VDRs need to be carefully structured and organized. In this article, we’ll discuss everything you need to know about structuring a virtual data room for M&A transactions.

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6 Myths That Can Derail Your Business Exit Strategy

Every entrepreneur has dreamed of striking it rich by selling their company for millions or even billions of dollars. From Facebook’s purchase of WhatsApp for a mind-blowing $19 billion, to Microsoft’s $7.5 billion buy of GitHub, the tech industry is full of startup success stories.

In reality, however, achieving your startup goals will require a great deal of forethought and strategic planning. Just as buildings need to have well-built, clearly defined exits, startup founders need to establish a well-built, clearly defined exit strategy for their company—whether that means going public in an IPO, or selling the company in an M&A deal.

Along the way, you’ll need to bust some of the common misconceptions surrounding M&A opportunities. In this article, we’ll discuss the realities behind 6 of the most common exit strategy myths.

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Why It's Critical to Prepare for M&A from Day One

In March of this year, we hosted the webinar “Start with the Exit in Mind: Building M&A Value from Startup to Exit,” helping small businesses make the most of their opportunities in mergers and acquisitions. During the webinar, it was mentioned that knowing how you want to exit is almost as important as knowing how you want your business to operate.

Preparing for your exit early doesn’t mean that you’ll necessarily make an early exit—it means that you’ll be ready for an M&A deal whenever it arrives. In this article, we’ll discuss 3 reasons why you should get a jump on the M&A planning process as soon as possible.

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M&A Due Diligence: 4 Things to Look for Before Completing a Deal

In 2012, following an $11.1 billion takeover of Autonomy a year earlier, HP recorded a record of around $8.8 billion. Following an internal investigation, HP alleged that Autonomy had “accounting irregularities” that had contributed to overpricing their business (which Autonomy strenuously denied). At around the same time, shareholders sued HP for the losses they incurred, eventually settling for $100 million.

What a mess!

It begs the question: if a giant like HP can’t get their due diligence right, what hope is there for other businesses? In this case, as in many other disastrous M&A actions, it’s the things you don’t know that cause the most significant problems.

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M&A Highlights from the First Half of 2019

Mergers and acquisitions are some of the biggest events in business, with the potential to shake up entire industries. Companies engage in M&A deals for a variety of reasons: gaining access to new technologies and markets, getting a leg up over their competitors, expanding along their products’ supply chain, and more.

Now that we’re firmly into the second half of 2019, it’s a good time to take a look back on what the first half of the year held for M&A deals. In this article, we’ll discuss some of the biggest M&A events in the first half of 2019 and take a look at what’s coming in the remainder of the year.

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4 Signs the Time is Right for a Virtual Data Room

Over the years, the increase in the digitization of both personal and business records has made it possible for organizations to streamline their day-to-day processes while reducing their total operating expenses. One example of this efficiency is in the deployment and management of Virtual Data Rooms (VDRs).

In the past, companies engaging in mergers and acquisitions (M&As) or those in need of better information privacy needed to rely on physical data rooms. These secure rooms house rows of data reserved for secure document exchanges, file sharing, legal transactions, and financial due diligence. However, these facilities are notoriously costly to manage and lack the transparency and accessibility that most organizations need today.

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What Buyers Expect to See in Your Virtual Data Room During an M&A Transaction

Businesses that once relied on rows and rows of filing cabinets to store company documents have now shifted to virtual data rooms, also known as online data rooms. These digital warehouses serve as repositories for storing information and files about an organization: everything from financial statements and lists of company assets to contracts and HR data.

Virtual data rooms are particularly useful for the due diligence process during mergers and acquisitions. Potential M&A buyers want to see that you have all your ducks in a row, investigating and auditing your organization in order to limit the risk of the transaction.

By placing your documents in a centralized repository for easy access, virtual data rooms can significantly speed up the due diligence process. In this blog post, we’ll discuss some of the most important forms and information that you should have in your virtual data room during an M&A transaction.

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Startup Transitions: Signs It’s Time to Move On

Creating a business is an incredible process. Founders, CEOs, executives and even staff who get in on the ground floor of a startup put their heart and soul into businesses, which is usually a good thing. However, this means that there are lots of emotions involved. Many founders refer to their startups as their babies and feel a strong tie to the businesses. This feeling is helpful. It is what keeps other team members fired up and it fuels the long days and nights spent at the office fixing problems and making it all happen. However, this emotional connection to the company can also keep CEOs and founders involved in the business past the optimal point to get out. How do you know when it's time to move on and sell the business?

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The Balancing Act: Perfecting Due Diligence

When planning a merger or acquisition, due diligence on part of the buyer is of critical importance. Not only does due diligence help to identify potential red flags during financial transactions, but it can also be beneficial to both buyers and sellers when revealing fair market values for businesses and assets.

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How Technology Will Transform M&A in 2019 and Beyond

Mergers and acquisitions are becoming larger, more complex, and more valuable than ever before. Recent years have seen a rise in “mega-mergers” such as Disney-Fox, AT&T-Time Warner, CVS Health-Aetna, and Heinz-Kraft—each one worth tens of billions of dollars.

What’s more, it’s not just giant corporations that are merging. According to Accenture Research, 87 percent of firms have acquired another company in the past two years.

As this growth in M&A activity continues, businesses will need cutting-edge technological solutions in order to successfully execute the transaction. In this article, we’ll discuss 3 ways that technology will transform M&A in the short and medium term.

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