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What Private Equity Cares About and How Executives Should Position Themselves

Written By: Gerald O’Dwyer IIThe PE Guru — Blackmore Partners, Inc | December 12th, 2024

Private equity (PE) is a world where results define reputation. It’s not just about what you’ve done but how you frame your past achievements to align with what PE firms care about: value creation, scalability, and exit-readiness. For executives with or without PE experience, this article will explore what PE measures, why it matters, and how to recalibrate your narrative and approach to position yourself as an investor-operator, not a W2 executive.

What Private Equity Firms Care About

1. Growth and Profitability Metrics

PE firms focus on measurable outcomes that drive value:

  • Revenue Growth: Consistent and scalable top-line growth.
  • EBITDA and Margins: High EBITDA margins with room for improvement signal operational excellence and cost control.
  • Recurring Revenue: Predictable income streams, such as long-term contracts or subscription-based models.
  • Customer Concentration Risks: A balanced customer portfolio to reduce dependency on a few key accounts.

2. Scalability and Repeatability

  • Infrastructure Readiness: Systems, processes, and teams that can scale without breaking.
  • Cross-Selling Synergies: Opportunities for leveraging complementary products/services across business units.
  • Operational Leverage: Can growth be achieved without a proportional increase in expenses?

3. Exit Readiness

  • Predictable Results: A clear, data-driven path to achieve investment goals.
  • Valuation Drivers: Metrics like customer lifetime value, acquisition costs, and pipeline-to-revenue conversion rates.
  • Clean Due Diligence: Accurate financials and transparent operations.

4. Leadership Approach

  • Investor-Operator Mindset: Demonstrating decision-making that prioritizes enterprise value, not just operational success.
  • PE-Specific Expertise: Managing within accelerated timelines and high-pressure environments.
  • Resilience: The ability to lead through pivots, growth challenges, and organizational change.

Why These Metrics Matter to PE

PE firms have a singular goal: achieving a high-value exit in a defined time frame. Every decision revolves around maximizing return on investment (ROI) and minimizing risk. The metrics they track are designed to:

  1. Enhance Valuation: Revenue growth, EBITDA margins, and customer retention drive enterprise value.
  2. Demonstrate Scalability: Buyers value businesses that can grow without heavy reinvestment.
  3. Reduce Risk: Balanced customer portfolios and clean financials protect against volatility.

When PE firms evaluate you, they assess whether you understand this context and can deliver these results.

Framing Your Past as an Investor-Operator

PE firms believe past performance = present capability. Your history must reflect not just operational expertise but strategic decisions that align with PE goals. Here’s how to recalibrate your narrative:

1. Highlight P&L Ownership

  • Show that you weren’t just “running” a division—you were creating value.
  • Replace generic language like “oversaw $50M in revenue” with:
    • “Drove 15% YoY revenue growth while improving EBITDA margins from 18% to 22% by optimizing supply chain efficiencies.”

2. Emphasize Value Creation

  • Focus on actions that enhanced enterprise value:
    • “Led a product portfolio transformation, reducing customer concentration from 40% to 20%, increasing buyer attractiveness.”
    • “Implemented a CRM system, resulting in a 30% improvement in pipeline-to-revenue conversion.”

3. Contextualize Challenges and Solutions

  • Share how you navigated challenges with strategic decisions:
    • “During a downturn, pivoted sales strategy to target aftermarket clients, maintaining 12% growth while reducing cost-to-serve by 10%.”

Questions Executives Must Ask Themselves

  1. Am I Showing Scalability?
      • How did my past decisions prepare the business for growth?
      • What systems or processes did I implement to handle increasing complexity?
  • Am I Demonstrating ROI Thinking?
      • How did I balance short-term wins with long-term value creation?
      • Did my actions contribute to measurable improvements in valuation metrics?
  • Am I Aligned with PE Priorities?
    • Can I articulate how my past roles align with PE goals (growth, efficiency, exit-readiness)?
    • How can I highlight my ability to drive EBITDA growth and mitigate risks?

Shifting from W2 Executive to Investor-Operator

PE firms aren’t looking for employees—they want owners who think and act like investors. Here’s why this shift matters:

  • W2 Operator Mindset: “I execute what’s assigned.”
  • Investor-Operator Mindset: “I strategize, execute, and optimize to maximize value for stakeholders.”

Why This Matters:
In PE, every decision must be tied to ROI. Being seen as an investor-operator demonstrates that you understand this mandate and are capable of executing it.

Why Begin Now?

PE firms don’t reward potential; they reward proven results. Starting your journey today means aligning your narrative, building your network, and honing the skills PE values. Waiting only delays your ability to enter this high-stakes, high-reward environment.

Michael Jordan said it best:
“You can practice shooting eight hours a day, but if your technique is wrong, then all you become is very good at shooting the wrong way.”
Start practicing the right way now: reframing your experience, learning PE metrics, and becoming the kind of leader who stands out to investors.

How BlackmoreConnects Helps

BlackmoreConnects provides the tools and guidance to help executives navigate this journey, including:

  1. Rewriting Your Narrative: Tailoring your experience to reflect value creation and alignment with PE priorities.
  2. Workshops and Mentoring: Learning the language of PE and refining your pitch.
  3. Network Building: Gaining access to PE firms and decision-makers who need leaders like you.

Case Study: A Transformation Journey

The Challenge:
An executive with a strong operational background but no PE experience wanted to transition into a PE-owned company. Their resume listed achievements but lacked metrics that resonated with investors.

The Solution:

  • Reframe Experience: Highlighted specific P&L improvements, such as growing revenue by 20% while maintaining margins during a volatile market.
  • Show Scalability: Positioned their role in implementing a CRM as a move that improved pipeline visibility and forecast accuracy by 25%.
  • Focus on PE Metrics: Emphasized actions that reduced customer concentration risks and streamlined operational costs.

The Result:
The executive was hired as an Operating Partner in a mid-market PE firm, demonstrating their ability to think and act like an investor.

Take Action Now

Private equity is not about simply landing a job—it’s about proving that you can drive enterprise value. Start reframing your narrative, aligning your skills, and preparing to enter a world where results are everything. BlackmoreConnects is here to help you make that leap and ensure you’re ready to play the PE game the right way.