Decoding the Mathematics Behind Private Equity Outreach Strategies

Written By: Gerald O’Dwyer The PE Guru 

Building a network with private equity (using Blackmore) (PE) firms as an executive can be a strategic career move. Given your experience and the information provided, here’s a detailed strategy to connect with PE firms and the rationale for the size of the funnel you might need. 

 

 

Understanding PE Firm Strategies 

Industry Focus: PE firms often specialize in certain industries. Know the industries you have experience in and target PE firms with a focus on those sectors. 

 

Investment Stage: Some PE firms focus on early-stage companies, while others prefer mature, cash-flow-positive businesses. Align with firms whose investment stage matches your expertise. 

 

Geographic Preferences: Some firms prefer to invest in companies based in certain geographic regions. If you have experience in those regions, that can be an advantage. 

 

Value Addition: PE firms look for executives who can add value to their portfolio companies, often seeking out industry experts who can drive growth and operational improvements. 

 

 

Strategies to Connect with PE Firms 

Leverage Existing Contacts: Utilize your existing network to get introductions. PE firms value trusted referrals.  Use Blackmore. 

 

Industry Events: Attend industry conferences, seminars, and networking events where PE firms are likely to be present. 

 

Thought Leadership: Publish articles, speak at events, or participate in webinars to showcase your expertise in your industry niche. 

 

Direct Outreach: Craft a tailored outreach strategy to connect with PE firms. Personalize communication to demonstrate your specific interest in their portfolio and strategy. 

 

Social Media: Use platforms like LinkedIn to connect with PE professionals. Share insightful content to attract attention from industry players. 

 

Advisory Roles: Offer to serve on advisory boards or as a consultant to gain visibility and demonstrate your expertise. 

 

Executive Recruiters: Some recruiters specialize in placing executives in PE-backed companies. Build relationships with these recruiters. 

 

PE Industry Platforms: Join PE industry platforms or networks that allow executives to list their expertise and availability. 

 

 

Funnel Strategy and Math 

 

The funnel approach is about starting with a broad base of prospects and narrowing down to those with the highest potential for a match. 

 

Top of Funnel (Awareness): Identify a large number of PE firms that match your industry and expertise. For instance, if there are 200 relevant PE firms, all should be in your initial outreach list. 

 

Middle of Funnel (Interest/Consideration): Of those 200, you might find that only 40% are looking for executives at any given time. That brings you down to 80 firms. 

 

Bottom of Funnel (Decision/Action): Engage in deeper conversations with these 80 firms. Assume that half of them find your profile interesting enough to keep on file or consider for immediate opportunities, bringing you down to 40 firms. 

 

Conversion: Considering the PE industry standard, if a firm buys 2 new companies a year and you are a fit for multiple industries or niches, you may have a direct interest from 5% of these firms. That results in 2 firms (40 firms * 5%) that could potentially offer you an executive position within a year. 

 

Funnel Example: 

 

Top of Funnel: 200 PE firms 

Middle of Funnel: 80 PE firms (40% of 200) 

Bottom of Funnel: 40 PE firms (50% of 80) 

Conversion: 2 potential executive positions (5% of 40) 

 

 

Follow-Up Strategy 

 

Regular Check-Ins: Establish a regular follow-up cadence with the PE firms at each stage of the funnel. 

Update Your Value Proposition: Regularly update your PE network with your latest achievements, new skills, and additional value you can provide. 

Stay Informed: Keep abreast of industry trends and news, particularly any major moves within the PE firms you are targeting. 

Continuously Refining Your Approach 

As you progress, it’s crucial to refine your approach based on the responses you get. Adjust your value proposition and target list based on feedback and emerging industry trends. Track your interactions and focus on firms that show the most interest. 

 

 

Final Notes  

The suggested numbers are based on general assumptions and could vary greatly depending on your specific industry, geography, and level of expertise. The strategy requires a personalized approach and consistent effort. Additionally, it’s not just about getting a position but also about finding the right fit, which is beneficial for both you and the PE firm. Hence, the focus should be on quality connections over quantity.