In the world of M&A, one of the most important processes is that of the Q&A period (also commonly referred to as “due diligence”). Because the due diligence phase of the deal is vital to the entire process, it generally is the most complex and time-consuming portion of the transaction. This is because it allows the acquiring company (the “buyer”) to confirm all necessary information about the target company (the “seller”). This information includes financial, legal and other corporate data that is critical in order to complete the deal. Typically, the due diligence phase can last weeks and even months, as the gathering and review of relevant documents is a time-consuming endeavor.
One of the main bottlenecks that can happen during this phase of the deal is the flood of questions sellers receive from prospective buyers based on the information provided so far. Deciding when and how these questions get answered can be a crucial step in whether the deal gets closed — and if it gets closed in a timely manner.
The Role of Q&A Software
Because this period can be so complicated to work through, virtual data rooms like Caplinked have begun to develop specialized features to help teams tackle due diligence questions as efficiently as possible. This Q&A software, also referred to as the “Subject Matter Expert,” is a tool created to help streamline the due diligence process in M&A transactions. In short, its function is to allow workspace members to ask questions regarding specific documentation.
The basic Q&A feature of Caplinked’s VDR prevents the system administrator from having to field a stack of questions. It allows workspace users to ask questions, and administrators who are subject matter experts to respond to them individually (meaning responses to questions can only be seen by the original workspace poster and administrators) or in a FAQ section that all workspace users can access. This allows legal questions to go to the lawyer on the team, financial questions to the CPA admin and so forth. It allows confidential information to remain confidential, while also dramatically reducing the time spent answering similar questions from various stakeholders.
Introducing EZ Q&A
The newest version of our Q&A feature, EZ Q&A, takes this process one step further. This feature gives users of the platform the option to collaborate securely with other members of their group by allowing specific non-groups access to the Q&A feature. This means that specific groups can either take part in their own Q&A process (as the new upgrades allow for non-admins to answer questions, if enabled), or view a set of FAQs that are specific to their portion of the deal. This gives more flexibility to administrators, as it allows even further delegation of responses to various subject matter experts.
These innovations help your third-party VDR partner expedite the due diligence process, saving time, money and shared resources in the M&A transaction. The technology also delivers peace of mind, as its robust security features provide the level of protection that your M&A requires. Ready to see for yourself? Start your free trial today.