Is Your Fund the "Right Size" for Deal Origination with CAPTARGET?

Private equity buyers often start their collaboration with CAPTARGET with a simple question..."Are we the right size to work together?".

Often, smaller firms, including independent sponsors question if the time and economics are right to justify no longer performing all functions internally within their teams of 2-4 principles.  

Mid sized firms typically invest in internal team development first and push to understand how our service and augment the ROI of the existing legacy investment.

Large firms often view buy-side resources of all kinds as arrows in their quiver, each with a singular function as part of a more holistic approach to sourcing.

What size firms should be working with CAPTARGET?  ‍

We work with firms of all sizes and tend to see our client mix mirror the mix of the market.

Independent sponsors are our fastest growing buyer segment followed closely by smaller LMM focused committed funds. These groups typically have the benefit of starting their work with us early in the life cycle of their firm or fund. This means we start from scratch, testing and developing our perspective on research, content creation and technical execution.

While it takes longer to get these firms to a place where their pipelines are paying consistent dividends, this often has to do with establishing the firm as a known entity in the market. We encourage these smaller firms to view their origination effort not as a deal flow band aid but as a deal flow vitamin, a process that will strengthen the pipeline of the firm in perpetuity

Large funds make up the majority of the remainder of our client mix.

These groups typically have allocated the resources to build a robust origination team/structure that can include: retained buy side firms, internal corp dev teams, empowered port co's that source independently, data based tooling, and groups like ours. These firms come to our engagement model with a developed pipeline, active opportunities and their own data which often require a different approach to pipeline building.

Engagements with larger funds often mature to focus less on finding new targets and more on managing a maturing pipeline so that the internal team can focus on moving opportunities down the funnel. Since we have a people focused, fairly flexible engagement model, we can support both the pipeline management and pipeline build conversations at the appropriate stage and size of each client.

Does CAPTARGET work with 'mid-sized' funds?‍

The short answer is 'yes', with one key difference.  

While newer/smaller funds often work with CAPTARGET from the beginning to establish best practices in building and executing on their origination pipeline, mid-sized funds often engage with CAPTARGET after a period of reorganization or pivot in the context of their origination strategy.

Maybe the internal team cost didnt pencil, or a key member has left, creating an opportunity to optimize costs. These scenarios present a great opportunity to reduce cost while matching or increasing origination output but do often involve some relearing or retooling of internal processes as the firm's approach to organization evolves.

Regardless of firm size, one universal truth remains. All professional acquirers of companies need to look beyond generating their next deal, and focus on the long game of building, nurturing and maintaining healthy pipelines that scale and create meaningful ROI throughout the lifecycle of the fund.

Our core focus is not simply generating leads, it's helping our clients build a better mousetrap, one that should survive well past our working relationship.  

This means, CAPTARGET clients gain access to deal flow (which they wholly own), best practices through our great account strategy and management team, and the ability to allocate highly valuable internal labor units to vetting deals and building relationships, not sifting through data and managing outreach campaigns.

Learn more about our services here.