In a market characterized by high interest rates and a growing exit backlog, telling a truly persuasive equity story to potential buyers is more important than ever. It requires evidence that the asset’s performance has not just ridden on the coattails of broader market trends, that there is money left on the table, and that the company is set up to capture that value.
Preparation is key to building an effective story. To understand what work still needs to be done fund managers should consider the following questions:
- Do we really understand how potential buyers will perceive this company’s performance to date and have we drawn clear links between specific initiatives and their impact on EBITDA?
- Have competitive or market dynamics changed (or will they change) and are we aligned with management around what to do about it?
- Do we know how much gas current strategies have left in the tank and have we developed a data-driven perspective on the value left to pursue?
- Is management working on new initiatives to spur the next phase of growth and how much traction has there been so far?
- If those initiatives or traction are lacking, what needs to happen to develop a new plan that will show buyers why this company has potential?
- Is the current team the right one for the next stage of growth and are we confident that buyers will see it the same way? What functions or capabilities do we need to strengthen to increase credibility?
Answer these questions well and you can rise above competitors and attract attention in a crowded exit market.
As the market leader for private equity funds and their portfolio companies, we have deep experience working with portfolio companies to articulate the full potential value of the business, detail management’s contribution to financial outcomes, deploy a plan to prove that the company has what it takes to capture more value, and fold it all into an equity story that acknowledges the current market and competitive context.
With a strong equity story in place, we can help you optimize your exit approach, prepare selling documents, and pre-qualify buyers to maximize your returns.