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Value Creation with Repeatable Commercial Systems
The New PE Value Creation Playbook: Part Two
Value Creation with Repeatable Commercial Systems
In our last post, we made the case that PE firms are increasingly turning to commercial growth as the primary value creation lever during the hold period. The question now is whether the growth activity underway in portfolio companies is actually building toward something durable.
Most portfolio companies are not standing still.
Portco Growth: Marketing as reality check
Apr 18, 2019 10:00:00 AM — For many middle market companies, the vision that founded the enterprise can’t take it to the next stage of growth. So we spoke to Chief Outsiders’ Dawn Werry about how a market-based reality check can set an enterprise up to grow in new, and sustainable ways. Founding a company takes an uncommon kind of vision, talent and drive. But often guiding the company to the next stage of growth requires a different skill set than the one that built the business from scratch. Private equity firms understand this, and often show up with the capital and resources to make a great small company into an even better, and bigger enterprise. Sometimes the founder can adapt for that next stage, and other times, they struggle. After all, the founder’s approach took them this far, why can’t it take the business even farther? The answer sometimes requires a reality check about the company’s current status and what it takes to grow from there. Few people expect marketing to provide a reality check, but the marketing discipline needs to accurately assess the actual competitive landscape.
Chief Outsiders’ Inside View: The 2019 Bain Private Equity Report
Apr 12, 2019 12:52:45 PM — This far into private equity’s boom is bound to leave both LPs and GPs wondering how much longer the good times will last. They aren’t retreating so much as proceeding with caution and preparing for stormy weather, whenever it might arrive. The upside is there are ample ways to strike that balance, as the best GPs are stepping up their game to identify targets and sharpen diligence, while simultaneously planning for the worst.
Portco Growth: When Sales Stall, Look Beyond the Sales Strategy
Feb 1, 2019 3:10:45 PM — Private equity firms tend to focus on fixing sales when the real problem may be the marketing strategy. We spoke with Clay Spitz of Chief Outsiders about how to better understand what’s behind those disappointing sales numbers. It’s only natural for GPs to fixate on sales. It’s the quantifiable discipline closest to the top line. It’s also prone to problems. A recent survey of 400 B2B salespeople admitted that only 24.3% beat their quotas in 2018. And no private equity firm raises their next fund if their current portfolio is full of companies with underwhelming sales. What’s counterintuitive is that often sales problems aren’t about sales, but marketing decisions. And poorly managed marketing insights, strategy or execution might not be evident until sales slump. Which is why GPs should tap a marketing expert to help diagnose the issue.
Beyond the ABCs of Customer Due Diligence
Dec 14, 2018 10:50:29 AM — 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.