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The Operational Pivot Has Reached Commercial Growth
The New PE Value Creation Playbook: Part One
Series Introduction
Private equity value creation has entered a new era.
For years, firms could rely on leverage, market timing, and multiple expansion to help drive returns. That environment has changed. Capital is more expensive, exit timelines are less predictable, and buyers are applying greater scrutiny to the quality, durability, and repeatability of portfolio company growth.
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.
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.