By: Slade Kobran, Dawn Werry, and Evan Eckman
We recently hosted a LinkedIn Live with Evan Eckman, Dawn Werry, and Slade Kobran from Chief Outsiders. We welcome any comments or questions you may have. You can view a replay of the conversation.
In the increasingly competitive landscape of Private Equity (PE), the pressure to deliver differentiated alpha to LPs increases the importance of post-acquisition value creation. For many GPs, a key driver of value creation is go-to-market motion and a high performing revenue engine. As GPs navigate the intricacies of due diligence, post-acquisition, mid-investment, and pre-exit phases, the infusion of targeted marketing and sales strategies can be transformative in this value creation journey.
Before any acquisition, meticulous due diligence is paramount. For instance, Tapping into an executive with experience in the industry to assess the target company’s commercial operations and market position helps identify red flags that might be lurking beneath the surface. By combining that experience with voice of customer research approaches and tools, PE firms can gain a deeper understanding of market sentiments, potential pitfalls, and areas of opportunity. These insights can not only help de-risk the investment, they can help jumpstart the value creation plan.
Asking the right questions during this phase is crucial. What is the company's current market position? What are the potential growth trajectories? Are there any latent issues that haven't surfaced yet? What are the gaps in the company’s ability to execute? How does the company perform in-market vs key competitors and indirect alternatives?
Once an acquisition is finalized, the immediate post-acquisition phase is all about setting the stage for growth. Here, the experience of experts like Slade, Evan, and Dawn is invaluable. For instance, Dawn’s work with an equipment company, where she aided in pinpointing which go-to-market strategies to prioritize, underscores the importance of focusing your growth initiatives during this phase. The right senior executive support also helps company leadership offload some of the planning and execution elements related to sales and marketing to experienced operators. This can help the leadership focus on other strategic elements that come with new investors.
As the investment matures, the focus shifts to scaling operations, ensuring sustainability, and embedding accountability. Enter fractional CMOs and fractional CSOs. Their expertise offers a unique blend of strategic insight and hands-on operational knowledge, ensuring that marketing and sales strategies are not only designed but also effectively implemented. Even if a portfolio company puts a commercial executive in place, they can also help drive special projects and strategic initiatives that come up during the investment years, such as integrating additional acquisitions, entering new parts of the market, or assessing commercial organizations.
This stage often leads to a recalibration of progress and priorities. It also provides an opportunity for a gut check on progress around all the elements required for a high-performing revenue engine, from technology, to process, to people, and external agency support.
In the twilight of a PE investment, the narrative shifts to positioning the company for a lucrative exit. The Chief Outsiders' Growth Gears™ methodology is particularly potent here, offering a structured approach to ensure that the company's growth narrative is compelling and backed by tangible results. This stage also provides an opportunity to wrap up any outstanding transformation efforts and to determine how far to progress on key outstanding initiatives.
Go-to-market expert CSOs and CMOs can play a pivotal role at this stage. In addition to ensuring crisp execution of the key sales and marketing initiatives, their experience can be invaluable in framing the growth story to be included in the next transaction process.
In conclusion, the multifaceted world of PE demands a holistic approach to value creation. By intertwining proven marketing and sales strategies across various deal stages, and leveraging the expertise of seasoned professionals like Slade, Evan, and Dawn, PE firms can not only amplify their returns but also ensure their investments are poised for sustained success.
In case you missed it, watch the recording: