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Epi 39: How Data Science Supports M&A, IPOs and SPACs – Mark Williams, Chief Revenue Officer of Datasite

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JC: Welcome, everybody to another episode of The Future of BizTech. I’m your host, JC Granger. I have with me here, Mark Williams, who is the Chief Revenue Officer of the Americas for Datasite. Mark, thank you so much for coming on the show with us. Tell the audience a little bit about yourself. And what is it that Datasite does?

Mark: JC well, firstly, thank you for having me on the podcast. So we are a SaaS company providing solutions to the capital markets. So that’s everything from a company that may be fundraising to a company that may be acquiring the company divesting an asset sale side, and, or maybe participating in something like back.

JC: So, one, I find it interesting because you’re the first software I’ve ever seen, that works in like an M&A field. Right. It’s a very specific niche. I think it’s really cool. You brought it up SPAC, that has been all over the headlines. You know, some people don’t know what it is at all. Some people understand a little bit about it, kind of give us the layman’s terms, rundown of what exactly a SPAC is, and why it’s become so popular. And then after it, tell us how your software helps with that. 

Mark: Okay, I’ll start with what a SPAC is. So SPAC is an acronym for Special Purpose Acquisition Company. And as the name would suggest, it is a company that’s often referred to as a blank check company that has completed a public listing, but it doesn’t have any tangible assets. It’s basically just capital that’s been put together for investors. And it is looking for a target company to acquire and merge with, hence the name special purpose acquisition company. So that’s what a SPAC does. Last year, over $75 billion dollars raised by folks creating SPACs, to go find target companies to take public. They’ve been around for a long time, gained popularity because of the change in some of the fee structures, and also the change in some of the market perception around IPOs, which is a more traditional way for a company to access the public markets.

JC: And then how does your software, how does Datasite even work into this equation? And we don’t necessarily focus on specs, but I was just curious, you know, how you know what is Datasite do when it comes to that or other types of M&A, you know, logistical issues or financial issues?

Mark: Exactly, JC. So, Datasite supports a range of capital markets transactions from M&A to IPOs, to SPACs. And what we do is provide a platform that enables the due diligence to be completed for potential investors to look at “Is this a company we want to invest in?” So I’ll give you an example of what that might look like, let’s say that you want to look at the financials of a company, we would host those financials on our platform securely. And with very specific permissions, you would have the ability to access those financials, take a look at them and make sure it was the type of company that you wanted to invest in. Now, in terms of the company that is providing those financials, they want to make sure that they are secure that you can see them but you don’t have the ability to download and then keep them.

JC: What does it prevent against? I mean, what if somebody want to screenshot? I mean, like, can it provide against everything? Or is it just so much data that no one’s going to take that kind of time anyway?

Mark: Yes, we have various technologies to close down access and to prevent, you know, kind of unauthorized access across the platform, we obviously do that down to the to the user level. So yeah, it’s a very specialist capability, versus just using a generic file-sharing type of technology.

JC: And so another question. So who is this really for? Is it for the company that wants to acquire another company? Or is it for the company who maybe is putting themselves up to be acquired or, you know, in some fashion and saying, “Hey, here’s all our stuff right now to be transparent?” Do you find that it’s heavier in one than the other? Like, who are you really going after with your software,

Mark: We’re actually going after both of those types of companies, the company that is potentially for sale and wants to solicit bids from potential buyers or investors, and they are providing those materials in order to be transparent and attract buyers or investors. And then also for companies that are looking to acquire assets who want to make sure that those assets, you know, are as advertised and do their due diligence. And, for example, if somebody is acquiring an asset, we provide specific capabilities to that corporate development team, but they’re going to bring in outside specialists, so they’re gonna have their outside counsel. They may have a specialist, intellectual property advisor, they may have a specialist in the field, you know, regarding The actual asset that they’re buying, given them a view on the value of that asset. So we enable all of those parties to come together in order to affect that transaction. And then we do that at scale in the Americas. This year, we’ll support over 5000 of those buy side or sell side fundraising IPO or SPAC transactions.

JC: Wow, that’s really cool. Well, and that’s actually a good segue into my next question, which, so you know, I have an agency, you know, we do B2B software companies. That’s our that’s our specialty. So I always ask, you know, what are you doing? As a B2B software company? And a lot of the audience are people like yourself, too. What are you guys doing to get the word out that you know, you’re on the podcast, right? So that Okay, that’s one thing, right? We know, we know that you got some PR going. That’s good. But, you know, are you guys? Is it all referral-based? Is it because it’s such a small niche that you don’t really need to market? are you guys doing, you know, email or paid ads or content? You know, what kind of things are you guys doing that’s successful? And maybe what have you done that you saw maybe didn’t work?

Mark: Well, I’ll start off with the things that do work. So we have a direct sales team go to market, we also have a web presence. So we obviously work with various search words and search terms, depending on what type of transaction you’re looking at, to make sure that if you are considering that transaction type, and you haven’t already heard of us, that will pop up and will be on your radar, the community is a pretty tight community. So referrals are very important for us. And then, because of the types of companies that operate in the community, we’ll deal with, for example, an investment bank, you know, some of the large investment banks will do over 100 transactions a year with the same team at an investment bank. So having that consistent experience supporting them, making sure that they’re successful, that means that the next time they win a mandate with a company, you know, that they’re going to pick us to use as the platform to perform that due diligence. So there’s a range of go-to-market and market coverage tactics that we use. And we’re pretty broad with all of them.

JC: What other features does Datasite have? And we talked a lot about, obviously, that having that kind of secure financial upload and review capability for both sides, which in itself is massive. But what else does Datasite do that surrounds that M&A process, maybe like other, you know, a couple other really big features beyond that, that are that the audience will want to hear about or that are helpful?

Mark: Yes, very much. So. And maybe to understand why some of those capabilities are important, I’ll frame it like this. Originally, due diligence was done, where content was printed off and put in a physical room and people entered the room and read the contracts, looked over the documents, things like that. And the first virtual data rooms were really a digitization of that physical process. What we’re on now is the cusp of using technology to take that to the next level. So and I’ll give you an example of that – we’ve got AI enabled in the document processing phase. So when you upload that content on the data side platform, we interrogate it, and we give you kind of a suggestion of what type of content that is, where it should go, what folder it should be in, is it an HR employment agreement? Is it a customer agreement? Is it financial information? Is it ESG content, so we’re taking significant time out of the uploading process, not just in terms of the speed of the upload, but the categorization of the content, so that the deal teams can get that content ready for diligence. And then the teams that are actually reviewing it have sophisticated tools to get the answers they need, so that they can get deals done a lot faster.

JC: So that I like because there’s seems to be a logistical support to the financial support of it. Right? And all that goes together. And you know, it’s funny when, when you came across my plate, so to speak for this, you know, I get approached about three, four times a year, typically from private equity firms that are looking to roll up agencies, right? And I noticed that there was a massive influx right near that end of 2020, early 2021, as COVID started to wind back a little bit, right. And I figured what was happening essentially was that, you know, just like any major event that can wipe out parts of an industry, whoever’s left standing, has more value and then the big companies want to come in and gobble that up, too. So I guess my question is, what have you seen as far as has there been a massive uptick just naturally in people using your software because of you know, all this money moving around and you know, companies going down some that are being grossly undervalued because they took a hit and then other companies come in to acquire them. Are you seeing a spike? Not maybe because your own efforts but As much as just of the industry and what’s happening now that we’re coming out of COVID into this kind of boom?

Mark: Absolutely, I think there are a couple of factors at play JC. The first one you mentioned, there’s a lot of private equity, dry powder. And those private equity firms are looking to put that capital to use in order to secure return for themselves and their investors. The second phenomenon is, if you have proven during COVID, that your business model is resilient, and you get rewarded for that, and valuations are pretty, pretty frothy, and roll-up opportunities are certainly there. And then the third phenomenon is companies that wouldn’t have maybe otherwise found a new route to market or a new customer base because of COVID, evolve their business models and that’s seen them, you know, kind of execute in ways that they previously hadn’t. So a lot of digital transformation has happened or been accelerated as a result of COVID. So those three macro things all interacting, we’ve seen a pretty healthy deal market this year.

JC: That’s (inaudible). I’m glad to hear that. Okay, so I wouldn’t be, I couldn’t call the Future of Biztech if I asked about the future. So I got it’s a two-part question. First part is, and you talked about AI a little bit, but how you guys are using it. And I know that you guys are probably very unique service in a small niche, right. That being said, I want to know, where do you see your industry in general, as in the space that you play in the m&a software space? Where do you see that going in the next five years? or so, you know, in how do you see other things like AI and other companies or technology playing into that? And then secondly, after that, you know, what’s coming down the pipeline for your company specifically for Datasite? You know, like I said, my audience likes to likes to get the inside scoop. Right. So I have to go for it. Right. So if there’s anything coming down that they can hear about first, they’ll be awesome. But yeah, where do you see the industry going? And then where’s Datasite going?

Mark: I think where the industry is going, they’re still, we’re just at the beginning of the digitization of the M&A process. And I think there are a lot of opportunities in the entire life cycle to improve the efficiency of tasks that get done, or to automate some of those tasks through technology. It’s still a very heavy people process environment for getting deals done. So I think there’s a lot of opportunity there. And I mentioned that we’re using AI in the document interrogation categorization. That’s just the first real area that we’re seeing, you know, kind of big benefits. And I think there’s a lot of other opportunities for that technology in the data side platform. So expect to see us come up with more announcements of where that’s been used across the platform to help dealmakers so that I think is the big opportunity for Datasite over the next two, three years.

JC: Very cool. Thanks. Now, I’m gonna switch real quick to more of a personal question, right? completely random. And I asked this sometimes to my guests, you know, when you were a kid, what did you want to do when you grew up? so to speak, right? And then are you doing that now? And if not, how did it make that turn? Like, what was that journey from being one be like a firefighter to this, or whatever it was? Right? So what do you want to be as a kid? And then how did that how that get to where you’re at now?

Mark: So I grew up in the Northeast of England. And like a lot of my friends, my dream was to play for Newcastle United Football Club. That was a somewhat unrealistic dream. So I ended up going school and getting my degree in mechanical engineering.

JC: Oh, wow. Okay, and then how to mechanical engineering, transition to M&A? Just out of curiosity, what was that pivot from, from where your education degree went to this?

Mark: So coming out of coming out University, the engineering space was going through its own digitization process, and I got involved with technology during that time, and then joined a I was employee number 30, at a start up in London, and we took venture capital IPO on NASDAQ, and I got into m&a and capital markets through that experience, I would say it was good luck rather than good planning.

JC: I’ll take luck over skill any day. So listen, I think your software is great. And what again, what I really like about especially now, because there’s there’s so much you look at Robin Hood and how that came on new retail investors you’ve got I even got a notice from Robin Hood the other day that they’re allowing now retail investors to go into a lottery system to have access to IPOs when usually only the big firms get that, I mean, the markets cannot be shifting faster if they tried at this point. So I think it’s really cool that you have a software that’s adapting to that and helping that process be streamlined. So for anyone listening, you know, if you are looking to be acquired or if you are getting acquired, my will look into data site to make sure that you know, to keep everything in that due diligence, a little more organized a little more, you know, automatic and secure. So I think that’s really cool. Mark, thank you so much for being on the show. How can people in the audience either reach you personally for maybe the big deals if they want to talk about that? And how can they reach Datasite in general?

Mark: Data site in general, I would suggest that you go to our dealmaker circle – area of the website, I think you’ll find some really useful content on there. And then

JC: Wonderful. Thanks again for being on the show. And I actually look forward to taking a look at your system. You have to maybe give me like a little demo log in or something to check it out.

Mark: I’d be happy to do that personally, JC.

JC: Thanks, Mark. Talk to you soon.

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