Private equity (PE) investors have come a long way since they first appeared shortly after World War II.

Their initial edge was their ability to do financial engineering where debt was used to make every dollar invested (note, invested dollars are called equity) generate a return multiple times what was originally invested (a.k.a.: multiple of invested capital or MoIC).

Think of leverage as a force multiplier; i.e., when one thing behaves as if it were many things…whether the thing is a dollar, a physical force, or a human resource.  

Second Wave of Private Equity Innovation

The second wave of private equity innovation came from studying best practices across ventures to set benchmarks for success based on the best performers in a given domain.

A benchmark is the standard against which performance is measured. Once the benchmarks that correlate with success are  known, the mandate is to configure operations to conform to best practices. Private equity firms got good at finding what performance needed to be and then driving management teams to conform to success norms.

What’s Next?

Now that financial engineering and performance benchmarks are standard practice, the question is: “What’s next?”. In his article, Three Phases of Private Equity, Kerry Moynahan tells us it is now all about people. We at IntellIVen could not agree more. Today’s private equity investors can no longer rely on just financial engineering, access to debt capital, and getting the operating metrics right to win big.

The battleground is now defined by portfolio company management team operating maturity. Having an aligned, diverse, high-performance management team lowers risk and shortens the time it takes to achieve the private equity firm’s investment thesis. Less risk and quicker results mean better performance and faster growth which means greater value. 

The best private equity firms assess their portfolio company management teams and proactively help them upgrade by:

A Proven Path to Maximum Value in Minimal Time

IntelliVen has developed a proven way to package what successful operating executives have learned into a form that helps those with lesser skill and experience perform at higher levels faster. In the very same way that private equity firms initially leveraged investment dollars, IntelliVen leverages intelligence, knowledge, experience, and wisdom.

We are independent successful operating executives who systematically package what we have learned running portfolio companies into a system that dramatically, and quickly, up-levels management team performance, growth, results, and value. 

While your management teams have survived the first wave, disruption can rear again in a flash. If things head south again, or if one of your teams could use some help pulling together their reset plan, guide them to get in touch remembering that, quite likely, only you can get your CEO to phone-a-friend for the help they need. 

If you are a proven executive who seeks a platform on which to work with top-notch, low-ego, high-performance operators get in touch at intelliven@intelliven.com to compare notes and explore the opportunities.