What are the benefits of using a data room?
You could be forgiven for thinking that, in the last eighteen months, everything has moved online. From grocery shopping, to family Zoom parties, to virtual work meetings; necessity has forced us to embrace the online world like never before.
When it comes to investor relations, the same is true. As worldwide lockdowns and travel bans came into effect, companies made the decision to move their investor relations outreach online.
This may have been a decision borne out of circumstance, but for many companies, the switch has been so successful, they have no plans to change as the world returns to ‘normality’.
Why is this; what is so compelling about online data rooms that companies are choosing to stay with them? Here, we explore the numerous benefits of using such a tool.
Why use a data room?
Even before COVID-19 was a consideration, the ability of virtual investor platforms to deliver efficient investor outreach and analytics was already seeing them gain traction.
A data room can make the search for investors easier, deliver information in a slick and insight-rich way, and as a result can see the ROI of virtual investor communications outstripping that of traditional investor relations channels.
The benefits of a data room
How do interactive investor platforms deliver value?
- They support our new working world. A survey by IR Magazine found that 75% of investor relations officers and 64% of investors said their working habits would permanently change as a result of the pandemic. Three quarters of IR officers had participated or were expecting to participate in a virtual roadshow in 2020, with benefits cited including a better use of their – and executives – time, an ability to fit in more, and better quality, meetings, and the potential to reach a far wider audience. An engaging data room allows you to showcase the best of your business, on your terms. Flawless technology, user insights and the highest security levels put you in control of your meetings.
- They are cost-effective. With investor relations budgets dropping by an average of 16% during 2020, your investor communications efforts need to evidence ROI. A virtual investor interaction solution is a cost-effective alternative to in-person presentations – which incur significant direct costs (travel, accommodation and venues) as well as indirect costs (administration and travelling time).
- They help you to reduce your company’s carbon footprint. Sustainability is a growing concern for investors and investment managers; nearly nine in 10 investors are starting to shift their capital to ‘greener’ investments. A data room supports this, by enabling you to reduce travel and cutting down on printing.
- They are highly secure. The best online investor solutions use the same ultra-secure systems behind electronic data rooms, where confidential information is kept for potential investors to inspect online during M&As; the technology has been tried and tested. The stored data is encrypted, with users having to pass a two-factor authentication process before they can access it. Permission-based access allows you to limit what each individual investor can see, with a detailed activity dashboard creating a compliant paper trail.
- They give potential investors detailed information when they need it. If you’re hosting a virtual roadshow, a data room can make information available to attendees long before the presentation starts. As a result, your potential investors can explore the issues in-depth and gain greater understanding – enabling you to have far more meaningful conversations with them during the event.
- Data rooms are very user-friendly. A straightforward user experience is vital if you want to engage users and maintain their interest. A good interactive platform will be highly intuitive, with good navigability and clear folder structures. Because access is possible from a range of devices, users can explore your offering wherever they’re working. And user-friendliness isn’t confined to the investor experience; host company administrators will find the process simple too.
- They deliver unparalleled investor insights. Detailed reports, intuitive dashboards and user-friendly management information give companies comprehensive insight into readers’ actions. See at a glance which elements of your offering are most popular, so you can finesse your IR and roadshow content in line with investor interest.
- They enable far more effective follow-up. A data room doesn’t just enable you to deliver information more effectively: it can help you to get deals over the line. Granular Management Information and insight makes one-to-one follow up meetings meaningful and effective, helping you to secure the investment you need.
Invest in a market-leading data room and enjoy the benefits
It’s clear, then, that online investor engagement has numerous benefits, for host companies, investment managers and potential investors. To find out more about Engage, Perivan’s market-leading data room, visit our website or get in touch.
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