Author: Gerald O'Dwyer

Overview

This case study explores the strategic journey of executives who have successfully managed P&L north of $25M and are now seeking private equity (PE) backing to acquire companies with at least $3M EBITDA, 10%+ EBITDA margins, and a distinctive business model in a fragmented market with numerous potential add-on opportunities. These executives are aiming for roles offered by PE firms, including board roles, advisory roles, interim roles, operating partner roles, and other C-level positions.

The Power of ACG, BlackmoreConnects, and Pitchbook

To increase their attractiveness to PE firms and secure these roles, executives must effectively leverage key resources like ACG (Association for Corporate Growth), BlackmoreConnects, and Pitchbook. These tools are essential for both landing a PE role and getting deals done.

• ACG Events provide invaluable opportunities to network with PE professionals and other industry contacts.
• BlackmoreConnects offers tailored workshops and connections that help executives refine their pitch and access a broad network of PE firms.
• Pitchbook is an indispensable resource for identifying potential targets, understanding industry trends, and making informed decisions throughout the deal-making process.

Demonstrating the “Investor-Operator” Mindset

To attract deal flow and PE interest, executives must embody the “investor-operator” mindset by:

1. Creating and Presenting Deal Theses: Develop well-researched deal theses that showcase a deep understanding of industry dynamics, target companies, and growth strategies.

1. Building Relationships with Owners: Proactively source deals by building strong relationships with business owners, signaling to PE firms their alignment with the firm’s objectives.

1. Rolling Up Sleeves: Demonstrate a hands-on approach to deal sourcing, showing a commitment to identifying and securing high-potential opportunities.

1. Funnel Process and KPI Orientation: Exhibit expertise in managing a deal funnel, including the use of KPIs to measure progress and effectiveness at each stage.

Deal Flow Strategies

1. Networking and Relationship Building

1. 1. • LinkedIn: Engage potential contacts, including brokers, investment bankers, lawyers, and accountants, through personalized outreach.
      • Professional Associations: Actively participate in organizations like ACG, AM&AA (Alliance of M&A Advisors), TMA (Turnaround Management Association), and BlackmoreConnects.
      • Database Resources: Regularly utilize Pitchbook and Cyndx to identify and connect with key players in the industry.

• Professional Events

1. 1. • ACG Events: Attend ACG events to network with PE professionals and establish valuable connections.
      • BlackmoreConnects™ Workshops: Participate in workshops designed to enhance networking skills and industry knowledge.
      • AM&AA Conferences: Engage in conferences to gain insights and expand your network.

• Direct Approaches

1. • Brokers: Connect with business brokers to explore potential opportunities.
   • Investment Bankers: Collaborate with investment bankers to discuss buy-side advisory roles.
   • Lawyers and Accountants: Engage with corporate lawyers and accountants who may have insights into businesses looking to sell.

Detailed Action Plan

Goal: Establish Strong Deal Flow and Network

1. Building Relationships

1. 1. • PE Conversations: Target 200+ conversations with PE firms over the next 24 months.
      • Owner Conversations: Aim for 50+ conversations with business owners.
      • Broker/Banker Meetings: Schedule meetings with at least 50 brokers, investment bankers, and other deal sources.

• Developing Deal Theses

1. 1. • Research: Draft at least three deal theses focusing on industries of interest.
      • Presentation: Present theses to PE firms to demonstrate industry knowledge and strategic thinking.

• Attending Professional Events

1. 1. • ACG and Other Events: Attend at least 10 ACG, AM&AA, and TMA events annually.
      • BlackmoreConnects Workshops: Engage in BlackmoreConnects workshops and webinars.

• Leveraging Databases

1. 1. • Pitchbook and Cyndx: Regularly use these tools to identify potential targets and maintain a dynamic CRM system for tracking interactions.

• KPI Tracking

1. • Deal Funnel Metrics: Track deals sourced, evaluated, and progressed through the funnel.
   • Relationship Metrics: Monitor new contacts, meetings, and follow-ups.
   • Outcome Metrics: Measure deals closed, roles obtained, and advisory/board positions secured.

Journey and Payoff

This journey demands persistence and dedication. Executives who diligently follow the outlined action plan for the next 24 months can expect:

• Deal Flow: Steady, robust deal flow that attracts PE interest.
• Network Expansion: A wide network of industry contacts and PE professionals.
• Role Opportunities: Increased opportunities for board roles, advisory positions, and interim executive roles.
• Revenue Streams: Diversified income through consulting, advisory roles, and successful deals.

Sample Action Plan

Conclusion

Executives who demonstrate the “investor-operator” mindset and strategically leverage resources like ACG, BlackmoreConnects, and Pitchbook can effectively create deal flow and attract PE funding. This approach not only opens acquisition opportunities but also enhances their professional network and potential revenue streams through various roles and advisory positions. By committing to the process, these executives position themselves as valuable partners for PE firms.