Private Equity Blog

Beyond the ABCs of Customer Due Diligence

Posted by The Chief Outsider

GPs can win invaluable insights into a potential acquisition by conducting high level interviews with customers that dive deeper than any standard issue survey ever will. Here’s how GPs can learn much more from talking to a target’s customers.

While GPs devote real time and rigor into performing due diligence into a possible acquisition, they sometimes will give short shrift to a constituency that’s key to the growth and the eventual success of the investment: the customer.

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Portco Growth: December is a Great Time to Evaluate Strategy

Posted by The Chief Outsider

The end of the year is a great time to step back and look at the broader strategic direction of a portfolio company’s growth plan and go-to-market approach. Here are 5 key elements to a comprehensive review.

Private equity firms aren’t afraid of data, and they have kept a close eye on performance metrics all year long. No doubt GPs will know the results and how they stack up against expectations. But as the year draws to close, it might be time to look at the overall strategic direction of your go-to-market approach and marketing effort.

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Family Affairs: Managing Growth at Family-owned Businesses

Posted by The Chief Outsider

When private equity firms look at acquiring family-owned and operated businesses, their best laid plans can be thwarted if they ignore the personal dynamics at play.

It’s only natural that private equity firms would be attracted to family-owned and operated businesses, especially ones that are successful but have plateaued. These enterprises can have terrific fundamentals but need precisely the capital and operational expertise that GPs bring to the table. But today, those firms need to do more than clean up a balance sheet and upgrade the operations. They have to drive growth. 

The challenge is that driving growth at family-owned companies requires extra time to discover the key influencers inside that business and win their support, with a compelling message that allows them to embrace change. If that was easy to do, the owners would have improved their business already and wouldn’t be looking to partner with a private equity firm in the first place.

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In Pursuit of Growth: What the Numbers Don’t Say

Posted by The Chief Outsider

Too many GPs rely on raw sales numbers rather than seek out the root causes of growth issues at a portfolio company, and that hinders their ability to develop effective strategies beyond rote solutions. And given today’s competitive landscape, those simply aren’t sufficient.

In private equity circles, the industry is well beyond the point of relying on mere financial engineering to generate returns. But we’re fast approaching a point where operational tinkering alone won’t do the trick either. Today’s assets don’t come cheap, and require real growth to produce an adequate ROI.

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The CMO Download: Sharon Spooler

Posted by The Chief Outsider

As part of an ongoing series at this blog, we’re speaking with fractional CMOs to discuss their philosophy and experiences creating value for their clients. This week, we sat down with Chief Outsiders’ Sharon Spooler.

Given the high prices of assets, growth is a top priority for private equity GPs. This has them looking long and hard at marketing tactics, which can feel like the real nuts and bolts of increasing sales, but without a well-informed strategy, there’s no guarantee those tactics will do any good. 

It’s a lesson that Sharon Spooler learned before joining Chief Outsiders, and that insight-driven marketing is key to how she, and the rest of her firm, view their discipline.

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