I often get asked for my thoughts on what private equity firms can do to improve both their individual image and that of the larger industry. Here’s something: Tell us your general plans for improving portfolio companies.
Here’s what I mean: When PE firms buy a company, they often are willing to talk about why they like the sector and/or the particular company. They’ll often discuss the deal-sourcing (proprietary, bank-run process, etc.), and maybe even some of the deal terms. But almost never will they explain their actual investment thesis.
I’m not saying that you should violate trade secret or put your companies at a competitive disadvantage. Or let Johnny in shipping know he’s being laid off via a media report. But every private equity firm has a top-level plan on Day 1, even if it doesn’t survive intact on Day 30. Get that story out to reporters covering the original transaction. It’s too late to make your case at exit, because by then we care about the new buyer more than the old seller.
If you truly want to be considered “value-add” – then let us know your plans for creating value (while we’re still paying attention).