Case Study: Strategic Networking with Private Equity Firms
Written By: Gerald O’Dwyer III
The PE Guru — Blackmore Partners, Inc | June 20, 2024
As a lower middle market executive, navigating the economic landscape characterized by generational wealth disparity and financial challenges requires a strategic approach to networking with private equity (PE) firms. This case study explores the decision-making framework to determine the most effective method for connecting with relevant PE firms, considering recent economic insights and available resources.
Context
Economic Landscape:
- Generational Divide: Older generations have benefited from credit-asset bubbles, leading to significant wealth accumulation, while younger generations face unaffordable asset prices and high debt.
- Economic Uncertainty: Recent insights, such as Fed Chair Powell’s admission of overstated job statistics, highlight the volatility and complexity of the current economic environment.
Challenges
-
High Costs of Traditional Networking:
- Time-intensive and often inefficient.
- Personal networking and generic directories offer limited success.
-
Access to Reliable Data:
- Essential for making informed decisions.
- Varying costs and comprehensiveness of different data sources.
Options for Networking
1. BlackmoreConnects:
- Features:
- Access to PitchBook, Cyndx, and D&B databases.
- Networking conferences with PE executives.
- Dedicated researcher support.
- Cost: $8,000 for 6 conferences (includes PitchBook and Cyndx).
2. Individual Subscriptions and Self-Research:
- Tools: PitchBook, Cyndx, D&B.
- Costs: Subscription fees.
- Time Investment: Estimated 120 hours over 6 months.
- Time Cost: $12,000 (at $100/hour).
3. Conference Promotions:
- Options:
- 1 conference for $1,999 (includes D&B Hoovers).
- 2 conferences for $3,000 (includes D&B Hoovers).
- 3 conferences for $4,000 (includes D&B Hoovers and Cyndx).
Comparison and Analysis
| Option | Cost | Benefits | Time Investment |
|---|---|---|---|
| BlackmoreConnects | $8,000 | Comprehensive data access, tailored networking | Low |
| DIY Approach | $12,000 (time cost) + subscriptions | Flexible, but time-intensive | High |
| Conference Promotions | $1,999 – $4,000 | Varied data access, fewer networking opportunities | Medium |
Decision Criteria
-
Access to Comprehensive Data:
- Essential for market insights and decision-making.
- Best achieved through BlackmoreConnects and 3-conference bundle.
-
Networking Opportunities:
- Direct, meaningful connections with PE firms.
- Strongly supported by BlackmoreConnects.
-
Cost Efficiency:
- Combining cost and time investment.
- BlackmoreConnects offers the most value.
Recommendation
Opt for the BlackmoreConnects 6-conference bundle ($8,000):
- Rationale:
- Includes access to PitchBook and Cyndx.
- Facilitates tailored meetings with PE firms.
- Cost-effective compared to the DIY approach ($12,000 in time costs alone).
Conclusion
Leveraging BlackmoreConnects provides the best combination of data access, networking opportunities, and cost efficiency. This strategic decision allows for effective navigation of the PE landscape amidst economic uncertainties.
Next Steps:
- Register for the 6-conference bundle.
- Attend upcoming demos to maximize the use of Cyndx and PitchBook.
- Engage with tailored meetings to secure investment opportunities.