Welcome back to The Private Equity Podcast, by Raw Selection! In this episode, Alex Rawlings, speaks with Geoff Lurie, Managing Partner at Traub Capital Partners. Geoff brings decades of experience as an operator-turned-private equity investor. He shares his invaluable insights on how private equity firms and portfolio companies can collaborate more effectively for superior results.
Breakdown:
[00:00] Geoff Lurie, Managing Partner at Traub Capital Partners, is introduced as an operator-turned-PE investor.
[00:25] Geoff emphasizes the need to focus on how price increases are perceived on the other side.
[00:55] Alex discusses the tough market conditions for private equity and hints at potential positive changes with increasing hiring and deal flow.
[02:18] Geoff explains the issue with PE firms assuming that entrepreneurs must suddenly change how they operate post-acquisition.
[02:47] Managing expectations and helping entrepreneurs report to the PE firm without losing their edge.
[03:42] Entrepreneurs struggle to adjust to reporting to external investors after being self-reliant.
[05:07] The importance of the first 100 days after an acquisition, setting up reporting structures and management.
[06:26] The crucial role of the CFO in portfolio companies, and why PE firms often replace them after acquisition.
[08:19] Geoff discusses how changing consumer sentiment impacts the success of private equity-backed companies.
[11:01] Differences between financial modeling and the practical steps needed to increase margins in portfolio companies.
[13:17] The importance of understanding real-world difficulties in implementing changes in portfolio companies.
[14:28] Alex asks how young private equity professionals can gain operational understanding without becoming CEOs.
[16:26] Alex plugs Raw Selection’s services, explaining the firm’s focus on executive searches for private equity-backed businesses.
[17:24] Geoff discusses the importance of managing debt properly and avoiding over-leverage in portfolio companies.
[18:23] Avoiding the mistake of using short-term working capital loans for long-term growth.
[19:42] Geoff explains how private equity firms motivate middle management by offering equity incentives.
[21:04] The importance of instilling an “enterprise, team, individual” mindset in portfolio companies.
[24:20] Geoff shares a personal anecdote about overhearing a young woman discussing her desire for a high-paying job without office work.
[26:20] Geoff talks about his transition from operator to private equity investor and why he made the switch.
[29:43] The best time to sell a portfolio company is on the way up, not at the top.
[31:10] Geoff explains the importance of setting up the right structure to allow CEOs to focus on future growth, not just day-to-day operations.
[32:34] Geoff shares that his passion stems from mentoring young professionals and imparting knowledge.
You can connect with Geoff Lurie on LinkedIn by visiting his profile here.
To be added to the book waitlist, you can email alex.offer@raw-selection.com
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The Private Equity Podcast, by Raw Selection