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Manual for Executives: Creating a Compelling Deal Thesis over 12 Months

Written By: Gerald O’Dwyer IIThe PE Guru — Blackmore Partners, Inc | November 26, 2024

Creating a compelling deal thesis is a journey—not a destination. It requires consistent effort, iterative feedback, and deliberate engagement with private equity (PE) firms, business owners, and customers. Success in the PE world comes from refining your thesis over time and building the relationships necessary to turn it into actionable opportunities.

A critical component of this process is attending BlackmoreConnects conferences every nine weeks, starting with the 12/18 conference. These conferences are structured milestones where you refine and advance your thesis. With each event, you tweak your strategy based on direct feedback from PE firms, who coach and mentor you, while also looking to build their benches with talented executives like you.

This manual provides a 12-month roadmap for developing a deal thesis, leveraging the unique learning opportunities at BlackmoreConnects conferences and workshops.

Principles for Developing a Compelling Deal Thesis

1. Think Like a PE Investor

  • Understand PE Priorities: PE firms focus on measurable ROI, scalability, and risk mitigation. Your thesis must align with these priorities by presenting clear strategies for growth, operational improvements, and exit planning.
  • Be Data-Driven: Support your thesis with credible data—market benchmarks, growth projections, and transaction analyses.

2. Treat the Process Like Getting a Job

  • Position Yourself as a Strategic Partner: Your thesis is your resume, and every conference is an opportunity to demonstrate your ability to think like an investor.
  • Invest in “Brand U”: Build your personal brand through LinkedIn, thought leadership, and participation in BlackmoreConnects events.

3. Build, Test, and Iterate

  • Build the Foundation: Start with a hypothesis about your industry and acquisition strategy.
  • Test Your Ideas: Use BlackmoreConnects conferences to present your thesis, gather feedback, and iterate.
  • Evolve with Each Conference: Treat every conference as a step forward in a continuous journey of improvement.

4. Recognize PE as a Contact Sport

  • Success in PE isn’t about working in isolation. It’s about engaging with the right people—PE firms, business owners, and customers—to build relationships, gain feedback, and refine your approach.

12-Month Roadmap to Creating a Deal Thesis

Month 1-3: Research and Foundation

  • Identify Your Target Market:
      • Choose an industry and segment where you have expertise or interest.
      • Research market size, growth trends, and key players using tools like PitchBook, Cyndx, and ACG.
  • Attend the 12/18 BlackmoreConnects Conference and Pre-Workshop:
      • Present your initial thesis to PE mentors and receive actionable feedback.
      • Use this input to refine your high-level strategy, focusing on industry trends, target profiles, and value creation.
  • Draft Your Initial Thesis:
    • Include industry context, target company profiles, and a clear acquisition strategy.

Month 4-6: First Iteration and Refinement

  • BlackmoreConnects Conference #2 (Approximately February):
      • Present the next iteration of your thesis, now incorporating detailed financial metrics and operational strategies.
      • Engage with PE firms to refine your focus on growth opportunities and risk mitigation.
  • Engage with Business Owners:
      • Begin conversations with owners of potential target companies to understand market dynamics and valuation expectations.
  • Refine Your Thesis:
    • Address feedback from PE firms and owners to add depth to your value creation and scalability strategies.

Month 7-9: Deepening Insights and Connections

  • BlackmoreConnects Conference #3 (Approximately May):
      • Share a more polished version of your thesis, focusing on growth and exit strategies.
      • Use mentoring sessions and post-conference workshops to sharpen your financial models and operational plans.
  • Talk to Customers:
      • Identify growth opportunities by understanding customer needs and challenges in your target market.
  • Enhance Your Thesis:
    • Incorporate customer insights and additional feedback from PE firms to make your thesis more actionable.

Month 10-12: Finalization and Presentation

  • BlackmoreConnects Conference #4 (Approximately July/August):
      • Present your refined thesis, demonstrating how it has evolved through each conference and interaction.
      • Use post-conference workshops to finalize your thesis and prepare for deeper engagements with PE firms.
  • Expand Your Network:
      • Build relationships with 200+ PE firms, business owners, and industry experts by leveraging your polished thesis as a conversation starter.
  • Execute and Iterate:
    • Use your thesis to pursue real opportunities while continuing to refine it as new insights emerge.

Key Components of a Deal Thesis

  1. Market Overview
      • Industry size, growth trajectory, and key trends.
      • Tailwinds (e.g., reshoring) and headwinds (e.g., skilled labor shortages).
  • Target Company Profile
      • Platform: EBITDA, revenue thresholds, and geographic fit.
      • Add-ons: Complementary capabilities, size, and scalability.
  • Value Creation Plan
      • Operational improvements (e.g., automation, cost reduction).
      • Financial strategies (e.g., working capital optimization).
      • Growth strategies (e.g., entering new markets, adding customers).
  • Exit Strategy
    • Monetization plan (e.g., strategic buyers, market consolidation).
    • Projected ROI (e.g., IRR, MOIC).

The BlackmoreConnects Advantage

BlackmoreConnects is your ultimate resource for developing and refining a compelling deal thesis:

  • Learn from PE Firms: Engage directly with PE mentors who coach and guide you at every step.
  • Advance with Each Conference: With every BlackmoreConnects conference, you take your thesis to the next level, incorporating feedback and new insights.
  • Expand Your Network: Build relationships with hundreds of PE firms, business owners, and industry experts.
  • Accelerate Your Learning: Use pre- and post-conference workshops to deep dive into your thesis and receive tailored guidance.

Practical Tips for Success

  • Commit to the Process: Dedicate 5-10 hours weekly to thesis development and relationship-building.
  • Leverage Feedback: Treat every conference and interaction as an opportunity to refine your ideas.
  • Build Relationships: Long-term success in PE comes from trust and meaningful connections.
  • Stay Persistent: Creating a compelling thesis is a journey, not a sprint—but the payoff is worth it.

Conclusion

Developing a compelling deal thesis over 12 months is a process of learning, iteration, and consistent engagement. By attending BlackmoreConnects conferences every nine weeks, starting with the 12/18 conference, you’ll refine your thesis step by step, advancing to the next level each time.

Every conference is a milestone on your journey, where you learn directly from PE mentors, connect with industry leaders, and build the relationships necessary to succeed in the PE world.

Remember, PE is a contact sport. Success comes from showing up, engaging intentionally, and continually improving. Let’s get started!