Value Creation in Private Equity – Why Preparation and Networking Are Essential
Written By: Gerald O’Dwyer IIThe PE Guru — Blackmore Partners, Inc | November 26, 2024
Introduction
Private equity (PE) is not a theoretical exercise; it is a contact sport that demands strategy, preparation, and a network of the right players. For executives looking to thrive in this high-stakes environment, value creation is not just about operational excellence but also about aligning with the PE model’s unique requirements. This case study explores the critical lessons from a webinar featuring Thamo Pentacolous, a seasoned PE-backed executive, to illustrate how value creation begins with preparation and is fueled by leveraging resources like Blackmore Connects and ACG conferences. We’ll also explore why Blackmore Connects is the most cost-effective and impactful way for executives to build their PE careers.
The Challenge: Value Creation Under PE Constraints
Thamo emphasizes a hard truth: in the PE world, you don’t have the luxury to “figure it out on the court.” With today’s higher debt loads and longer hold times (averaging seven years for PE firms), executives must develop their value creation playbooks well in advance. PE firms expect results almost immediately, and unprepared executives risk being replaced within 12-18 months.
The challenge is twofold:
- Strategic Growth: Executives must think not just about their immediate role but also about the next buyer and the buyer after that.
- Execution Excellence: Organic growth, pricing strategies, churn management, and talent upgrades are essential components of success.
Solution: Learning the PE Game Through Networking and Education
Thamo’s insights highlight the importance of networking and mentorship in mastering the PE game. Attending conferences and workshops, like those offered by Blackmore Connects, provides a unique opportunity for executives to refine their strategies, expand their networks, and align their efforts with PE expectations.
Comparing Blackmore Connects and ACG
Association for Corporate Growth (ACG):
- Strengths:
- Established network of professionals.
- Large-scale events provide broad exposure to PE players.
- Challenges:
- Costs add up quickly when factoring in travel, lodging, and registration fees.
- Limited one-on-one coaching or actionable takeaways.
- Networking often lacks the tailored focus executives need for PE roles.
Blackmore Connects:
- Strengths:
- Cost-Effective: At $1,299 per conference, Blackmore Connects offers a fraction of the cost of attending ACG events (which can exceed $5,000 per event with travel).
- Mastermind Workshops: These sessions dive deep into PE-specific challenges, such as value creation, deal sourcing, and portfolio company management.
- Coaching and Mentorship: Executives receive hands-on guidance to develop playbooks and navigate the PE landscape.
- Exclusive Tools: Access to platforms like PitchBook and Cyndx equips executives with powerful resources for deal sourcing and connecting with PE firms.
- Executive Network: Fellow attendees include seasoned PE veterans who share insights and opportunities.
- Tailored Tracks: Tracks designed for owners, operators, and executives at various stages of their PE journey ensure relevant content and connections.
Detailed Examples: Blackmore Connects in Action
Example 1: Building a Value Creation Playbook
Thamo illustrates how PE firms evaluate acquisitions not just for their current value but for their exit potential five to seven years down the line. Executives must:
- Understand their total addressable market (TAM) to ensure scalability.
- Develop adjacent market strategies (e.g., a physical therapy software company expanding into speech therapy).
- Upgrade talent to match growth needs (e.g., transitioning a customer success leader managing 70 clients to one capable of managing 1,200).
Blackmore Connects’ mastermind workshops guide executives in crafting these playbooks with feedback from experienced professionals.
Example 2: Leveraging Tools for Deal Sourcing
Access to tools like PitchBook and Cyndx is a game-changer for executives.
- PitchBook: Provides detailed analytics on deal flow, company financials, and market trends, enabling executives to identify potential targets and opportunities.
- Cyndx: Uses AI to connect executives with companies and investors aligned with their interests, streamlining the networking process.
Executives at Blackmore Connects conferences learn how to integrate these tools into their strategies, saving time and maximizing opportunities.
Example 3: Networking as a Contact Sport
At a recent Blackmore Connects conference, an executive leveraged connections made during a mastermind session to secure an introduction to a PE firm. That firm eventually invested in their company, leading to an eight-figure exit. Such outcomes are not uncommon when executives actively engage in Blackmore’s relationship-driven ecosystem.
The ROI of Blackmore Connects
For executives hesitant about investing in conferences, consider this:
- Networking ROI:
- Average new connections per conference: 30-50 executives and 10-15 PE firms.
- Over six conferences: 180-300 executives and 60-150 PE firms.
- Estimated value: $180,000-$500,000 (from deal leads, advisory roles, or strategic partnerships).
- Cost Comparison:
- ACG conference (including travel and accommodations): $5,000+ per event.
- Blackmore Connects: $1,299 per event with no travel required.
- Educational Value:
- Blackmore Connects offers actionable insights, tailored tracks, and access to tools like PitchBook and Cyndx, which ACG does not.
Conclusion
Private equity is a high-stakes game that requires preparation, networking, and the right tools. While ACG conferences provide broad exposure, Blackmore Connects delivers unparalleled value through its cost-effective model, tailored workshops, and access to essential resources. For executives serious about succeeding in PE, Blackmore Connects is not just an option—it’s the most strategic investment they can make.
Call to Action:
If you’re ready to take your PE career to the next level, attend a Blackmore Connects conference. With tailored tracks, access to PitchBook and Cyndx, and a network of seasoned professionals, you’ll be equipped to create value, seize opportunities, and achieve successful exits.