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The pandemic sparks use of new tools for evaluating investments
For many deal-makers, the lockdowns last spring brought business to a standstill until something remarkable happened: They found new ways to meet with clients and close deals. In this new age of reduced in-person meetings, a near stoppage of business travel and the unprecedented rise in employees working remotely, PE firms also adopted new methods of conducting the often time-consuming and most detailed part of closing a deal: due diligence.
Welcome to the age of “new diligence.” Say goodbye to extended business trips and pricey hotel stays, and say hello to virtual meet-and-greets and intensive data-sharing sessions via Zoom or Microsoft Teams. Virtual conferencing is among the technologies that became a critical enabler for nearly every business meeting during the COVID-19 pandemic, a development that still astounds some deal-makers.
“If you had told me we could close a nine-figure deal 100% via Zoom a year ago, I would have laughed at you,” says Steve Raymond, managing director of The DAK Group, a middle-market investment bank.
Raymond and his team followed their clients’ lead and held presentations, fireside chats and due diligence sessions using the ubiquitous video tool, and they haven’t looked back.
“We happened to work with a business that was operating in a distributed environment and they pivoted very quickly in May and June of last year. That business went 100% virtual,” says Raymond.