Beyond origination – best practices consulting recap

– to help them learn how to originate deal flow more effectively while also providing guidance on a possible rebranding/repositioning project.

The group came to us after recently closing their first portfolio company exit. They had spent years finding the company and subsequently became very active in its operations.  As such, when the exit occurred, they felt a little behind the ball in generating scaled deal flow quickly. This is where we typically come in.

However, in this case, the ask reached beyond generating deal flow.  Here is why:

To run a productive internalized origination effort every firm must recognize one fact – origination is marketing/selling. To sell anything in a competitive environment (which PE defiantly is) you must have a visible brand and a real differentiator to build from.  The more authentic the brand and differentiators are, the more successful the marketing tends to be, and private equity is no exception.

Branding impacts origination results

In our client’s case they had done a great job branding themselves as a traditional middle market PE shop.  This comes with a few disadvantages – differentiating on anything other than price or vertical expertise is challenging, and simply put, this was not who they were.

In reality, the group was more of a family office/holding company. They had no LPs and no mandated holding time.  Because of this they were more flexible than most private equity firms.  Prior to building an origination engine, they must align the brand strategy with you they really were…a family who wants to partner with other families regionally, and build something bigger and better together.

While we are currently working through the details, the short term plan involves a name change, a website relaunch and a general repositioning to appeal to an audience that generally does not often engage with a more conventional private equity buyer type. Our team will support the new site development and content strategy before turning to the origination effort.

Beyond the brand pivot

With the brand pivot planning to be put to rest over the coming month, the firm can refocus on scaling origination efforts. After assessing the firms strategy and internal capabilities it became clear that rather than building up an internal team and training them on how to best execute, the most cost effective solution will be to outsource the effort to our team.

Managing the prospect, content marketing, data management and vetting processes is simply too much for a two principal team to handle. For a total annual cost of around 34,000, our team will source leads both directly and through our significant intermediary network, vet and report these leads, handing off only opportunities worth principal time investment.  The firm will never have any obligation to  pay success or finders fees and  will retain the flexibility to scale the initiative up and down as needed.

Levering experts

While our focus remains helping PE firms origination more deal flow, this engagement is a great example of how having worked with a large number of PE firms allows us to draw from significant industry expertise in best practices to help solve for the root of the problem – in this case, a branding inconsistency that was depressing origination efforts.

If you have ever wondered if your firm is run in a way that is consistent with your competitors, or if you want to tap into a low costs, success fee-less origination process. We can help.  With consulting and monthly origination offerings there are many ways we can engage.  Email us at info@captarget.com for more information.

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