The Private Equity Podcast, by Raw Selection

Learn about creating value in private equity, building a value creation team, using templates for effective plans, benefits of repeatable checklists, importance of internal communication, building checklists and workflows, and tracking KPIs for value creation

Introducing David SoppDavid Sopp is the Senior Vice President of Business Development at Simply Beautiful Smiles (SBS), a dental service organization, owned by Sun Capital Partners. He and his team acquire, operate, and offer back-office services to general dentistry practices across the Mid-Atlantic area. They currently have 40 locations across five states. Before joining SBS, he was a private capital investor investing in private equity and sub-debt.What You Will Learn Perspectives from Being an Investor and an Operator Acquiring Businesses at Attractive MultiplesThe Attributes of Top Performing InvestorsBreakdown[0:50] Introducing David Sopp[3:58] What Made David Shift from Investor to Operator [6:43] What David Wishes He Knew as an Investor [8:30] Lessons from Private Equity [10:14] The Mistakes That Most PE Firms are Making[12:24] How to Acquire Business at More Attractive Multiples[15:36] Lessons for Lower-Middle Market Investors [19:27] Three Attributes of a Top Performing Investor[23:24] Advice for Operators, C-Suite Executives, and Portfolio Companies[26:23] What David Watches, Reads, and Listens To [28:20] Where to Reach David[29:01] Parting ThoughtsAcquiring Businesses at More Attractive MultiplesOne way is to know where to look, and that comes with developing one’s own proprietary deal workflow. More firms are considering entrepreneurs they’ve backed before and identifying investment ideas that no one else is pursuing yet. Another way is to use operating resources to create and realize upsides. It’s because there’s often more than meets the eye with businesses. Investors need to look into each element of a business to consider how it can potentially differentiate and diversify the business to generate more equity value. Finally, investors must change their mindset about investing. It isn’t always about financial engineering. Instead, investors should focus on building businesses with world class talent with more efficient systems. Building the exact asset that potential customers are looking for will allow investors to mitigate the prices they’re working with while also creating even more value to the business post-acquisition. 3 Attributes of a Top-Performing Investor?1.     Intellectual curiosityAs the world changes, so do investment strategies. Top-performing investors keep pace with the changing world by remaining curious about what’s new, how it’s going to affect their investments, and what challenges and opportunities are on the way. They need to be passionate about discovering new industries, meeting new people, and developing new skills. 2.     Ability to spot patternsIndustries, no matter how different, will often share similar characteristics. Being able to spot these allows top performing investors to get up to speed on new industries and business models much faster than others. Top investors can leverage the patterns they recognize to scope out a better due diligence process and run sensitivities about how likely negative scenarios are going to happen. As David explains, it also helps top performers spot show-stopping deals: investments with unmanageable risks. These help investors mitigate their risks and identify better opportunities.3.     Confidence Investing involves taking calculated risks and many people challenge investing decisions. Top-performing investors need to have the courage and conviction to articulate support for their investing theses. They need to ensure that their thesis makes sense. Without this ability, as David explains, deals aren’t going to get done.

Welcome to the Private Equity Podcast Playbook Series. In this series, we'll dive deep into crucial private equity subjects and provide playbooks that you can use to grow your firm or portfolio company.  Introducing Nevin RajNevin Raj is the Chief Operating Officer and co-founder of Grata, a B2B search engine for discovering small to middle-market private companies. At Grata, Nevin is responsible for leading business operations, from sales and marketing to customer success and product initiatives. What You Will Learn:How to Develop a Strategic Business Development PlanThe Best Way to Ask for Referrals in Private EquityHow to Play the Long Game with Private Equity Relationships  Breakdown[00:00] Introduction[01:18] Inbound Prospecting and Deal Sourcing[03:11] The Tools Needed for Proactive Business Development[04:39] How to Implement Proactive Business Development [07:30] Ways PE Firms Can Drive Effective Business Development [10:20] Understand that the Best PE Firms Play the Long Game[14:27] Building Relationships Before Process[16:10] How to Start Asking for Referrals[20:50] Ways to Build Relationships with Banking Executives[23:35] Build Better Relationships with Lawyers and Accountants[27:20] Engaging with Other Investors[31:50] The "In Real Life" Strategy[35:20] How the Top PE Firms Manage Relationships[37:40] Parting Thoughts  Proactive Business Development in Private EquityPrivate equity firms are in a tough spot. Competition is fierce, and finding good investments at fair prices is becoming even more challenging. To stay ahead, firms are stepping up their game in deal origination and getting innovative in spotting their next big opportunity. But there is a problem: who should be responsible for ensuring these initiatives work? More and more firms are bringing in business development professionals to fill that role. These folks ensure that the proactive efforts pay off as planned.According to Nevin, business development is proving to be a critical asset to PE funds. Once a firm start proactively building relationships, they should see a noticeable change in actionable deal flow within a few months. How to Contact ChrisNevin's LinkedInNevin's email - Nevin@grata.comGrata.com Thank you for tuning in!To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.  

Introducing Bryan GordonBryan Gordon is the Founder of “Madison Ventures+” Property Investments, a fund that has overseen the raising and deployment of over $1.1 billion of equity capital - generating an average annual return of over 30%. Bryan boasts over 35 years of experience as a serial entrepreneur, private equity investor, and risk management consultant.  What You Will LearnFocusing on the Upsides Versus Focusing on the DownsidesTeam Culture in PE FirmsThe Value of Human Capital Breakdown[00:45] Getting to Know Bryan Gordon[01:41] Common Mistakes by PE Firms and Their Portfolio Companies[03:56] Why People Are Essential for PE Success[05:20] Important Attributes of a Top Performer[08:10] Advice for PE Firms Looking for Long-Term Investments[11:40] How Bryan and His Team Achieves Yearly 25% Returns[14:05] Things Bryan Likes and Dislikes About Private Equity[18:30] Shifting from a Fund-Based Structure[20:35] Bryan’s Go-To Self-Improvement Resources[22:45] Parting Thoughts  Why People are The Most Important Element in a PE Firm The team element is crucial when finding and closing deals. Gone are the days when machinery and other tangible assets created value in an organization. Today it’s all about teams, execution, and intellectual capital. Your people are responsible for the way organizations transform data and resources into profitable deals to invest in. They bring unique talents and perspectives that can contribute to innovation and creativity within the organization. Bryan explains that when people are engaged and committed to their work, they are more likely to go above and beyond to ensure the organization's success.Overall, people are the lifeblood of an organization. They are the ones who drive its success, bring it to life, and make it thrive. Without people, a firm cannot achieve its goals, deliver its mission, or create a positive impact on its stakeholders. How to Contact BryanMadisonventuresplus.comBryan’s email: Bgordon@madisonventuresplus.comMargin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor by Seth A. KlarmanThe Art Of War by Sun TzuHarold and the Purple Crayon by Crockett Johnson​​Thank you for tuning in!To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.   

Introducing Kevin MoyerKevin Moyer is a Partner and Leader of the Transaction Advisory Services at Sax Capital Advisors, a nationally ranked accounting, tax and business advisory firm. He brings over a decade of experience and is responsible for the overall strategy and the delivery of client-related services. His robust knowledge lets him advise clients on financial and operational diligence, finance transformation, and corporate restructuring mandates.  What You Will LearnHow the Top PE Firms Deploy CapitalThe Importance of KPI DashboardingHow to Get the Most Out of Available Data Breakdown[00:00] Who is Kevin Moyer?[01:46] Common Mistakes by PE Firms and Their Portfolio Companies[03:32] How the Best PE Firms Deploy Capital[06:00] Kevin’s Transition From Finance to Private Equity[09:36] How to Gain the Most From Available Data[11:19] Ways to Drive Change in a Portfolio Company[13:25] How to Prepare Your Firm if We Do Have a Recession[15:26] What Kevin Likes and Dislikes About Private Equity[17:32] Kevin’s Go-To Self-Improvement Resources[20:08] Parting Thoughts  Getting the Most Out of Your Data in Private EquityWhen it comes to success in private equity, you need to use data to your advantage. There are data sets that exist within companies that many companies don’t know how to use the data. It gets worse when you realize that even more of these firms don’t know how to structure unstructured data. According to Kevin, the best PE firms know how to use unstructured data as a predictive mechanism going forward. And by doing that, you’re much more dangerous as a firm. It also makes adapting and pivoting before or during a catastrophic event possible.  With debt markets in turmoil, PE deals that dominated business headlines in recent years have gone missing. Yes, all firms are always looking out for new investment opportunities. But the best firms know that their existing portfolio companies are equally important. This is why they have systems to structure unstructured data to better manage their existing portfolio companies and maximize their return on investment faster and more efficiently. How to Contact Kevin:Sax Capital AdvisorsKevin’s email - kmoyer@saxllp.comKevin’s phone number: 973-472-6250​​Thank you for tuning in!To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com. 

Introducing Jay GoldmanJay Goldman is the Co-Founder and CEO of Sensei Labs, a Conductor used by the world's top organizations to orchestrate their most critical transformations. Jay and his team enable project management, collaboration, data tracking, and knowledge management that modern organizations need to be successful.What You Will LearnSources of Value Creation in Private EquityThe Accelerated Use of Technology in PE FirmsPeople Strategies and the Future of WorkBreakdown[00:45] Getting to Know Jay Goldman[01:41] Common Mistakes by PE Firms and Their Portfolio Companies[04:46] Value Creation in Private Equity[06:30] What is Portfolio Orchestration?[11:05] The Best Way to Raise Capital in Private Equity[16:00] Play Books to Help Accelerate Value Creation in PE[19:30] Technology Integration in Private Equity[27:17] The Future of Work[35:40] Consequences of Automating Human Labor[39:08] The Real Value of Work and More Engaging Tasks[43:05] Things Jay Likes and Dislikes About Private Equity[46:40] Jay's Go-To Self-Improvement Resources[51:47] Parting ThoughtsValue Creation in Private EquityWhat are some of the challenges and opportunities in private equity regarding value creation? According to Jay, value creation is a term that has been euphemistically used in the past to mean firing people. Of course, this is not what's happening or what it means in the industry today. Much has changed, and now more funds are determined to create value. Today, PE firms are focused on building better businesses by growing their ability to produce revenue, built on acquisitions, geographic expansion, repricing, or new product lines. However, this is not to say that cost reduction is not essential because it will always be a factor in almost every value-creation plan. But it is now less emphasized than it was in the past.How to contact JayJay on LinkedInSenseilabs.comThank you for tuning in!To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.

Introducing Jim RothJim Roth is the Founder and CEO of Zamo Capital, Europe’s first specialist investor inimpact, private equity, and venture capital firms. Founded in early 2018, Zamo invests in impact managers, providing capital, expertise, and an established network of investors to help raise new capital. Jim’s ability to identify and develop untapped market opportunities previously led to their co-founding LeapFrog Investments in 2007, a world-leading private equity manager that was ranked by Fortune as one of the top 5 Companies Changing the World. The fund was also endorsed by President Bill Clinton, who observed: “Leapfrog’s team is widely recognized as having opened up a new frontier for alternative investing.”What You Will LearnOpportunities forImpact InvestorsHow Responsible Investing Delivers Superior Financial ReturnsWhy Demand For Impact Investing Is RisingBreakdown[00:45] Getting to Jim Roth[01:37] Common Mistakes by PE Firms and Their Portfolio Companies[02:54] Why Jim Decided to Focus on Impact Investing[04:30] The Rising Demand for Impact Investing[08:24] Jim’s Definition of Impact Investing[10:44] The Type of Impact People Invest In[14:07] How Zamo Helps New Impact Investors Scale[17:52] Lessons From Managing Leapfrog[20:01] The Challenges Jim Faced When Scaling Leapfrog[23:27] How to Attract and Retain Top Talent[26:19] Things Jim Likes and Dislikes About Private Equity[28:39] Jim’s Go To Self Improvement Resources[30:40] Parting Thoughts The Rising Demand For Impact InvestingWhen most people think of investing, they immediately jump to publicly traded stocks or bonds. However, all that is starting to change with more and more people looking for investments that positively impact society. Impact investing is a relatively new approach to investing that aims to generate measurable social and environmental benefits alongside financial returns. It has gained popularity recently as investors increasingly seek to align their investments with their values and contribute to positive change in the world.The rise of impact investing is driven by several factors. First, there is a growing awareness of the pressing social and environmental challenges facing the world, such as climate change, poverty, and inequality. Investors recognize the need to address these challenges and are turning to impact investing as a way to do it. Secondly, and most importantly, impact investing has become more accessible in the mainstream in recent years. The increasing number of impact investing funds has made it easier for investors to find and invest in opportunities that align with their values.How to Contact JimJim’s LinkedIn: https://www.linkedin.com/in/jim-roth-zamocapital/Zamocapital.comContact Jim via email:Jim@Zamocapital.comThank you for tuning in!To get the newest Private Equity episodes, you can subscribe oniTunes or Spotify here.Lastly, if you have any feedback on the podcast or want to reach out to Alex with anyquestions, send an email to alex.rawlings@raw-selection.com.

Introducing Pari Natarajan Pari Natarajan is the CEO of Zinnov LLC, a leading Management Consulting firm that helps organizations globalize their businesses, tackle organizational challenges & build institutional capability. Pari and his team assist technology companies in improving their engineering efficiency and innovation capabilities through the effective use of globalization. He also works with large enterprises to help them build their internal technology organization and transform them into digital enterprises.What You Will LearnThe Basics of Value Creation in PE DealsWays PE Firms Can Successfully Transition a Business to a SaaS ModelHow AI is Revolutionizing the Private Equity SpaceBreakdown[00:45] Getting to Know Pari Natarajan [01:20] Common Mistakes by PE Firms and Their Portfolio Companies[02:37] Investment Opportunities for PE Firms in 2023[05:03] Steps to Successfully Transitioning to a SaaS Model[06:31] Why the Tech Industry is so Attractive for PE Firms[09:35] Technology Adoption in Private Equity[14:41] AI in Private Equity and What it Means for the Industry[19:17] Understanding the Core Aspects of Value Creation in PE Deals[22:26] Why Growth is Risky Business in Private Equity[24:57] Things Pari Likes and Dislikes About Private Equity[26:50] Pari's Go-To Self-Improvement Resources[27:31] Parting Thoughts Investment Opportunities for PE Firms in 2023Most private equity investors agree that 2022 was an okay year for PE firms. And with inflation and volatility still an issue in this economy, we could still have unique opportunities in 2023. That said, Pari believes PE firms should focus more on industries that provide recurring revenue streams. However, the SaaS model of selling subscription-based products is no guarantee of success. Companies with a concrete SaaS model are valued much higher than companies without a subscription model. Plus, the steep incline in PE firms buying SaaS means competition for well-functioning companies is high. But with proper research, you can still find companies worth investing in, recapitalizing, and outright buying in 2023. AI In Private EquityAI use is hot right now in almost every industry. Private equity is the latest industry to experience an AI takeover as more businesses look to take advantage of the practical applications of AI in business growth. As Pari explains, most PE firms are using AI to improve the state of their workflows and increase efficiency in day-to-day tasks. He highlights that AI in private equity falls into these three major buckets: Deal sourcing: AI can identify potential investment opportunities by analyzing large amounts of data from various sources, including social media, news articles, and industry reports. Automate Manual Processes: Most processes in private equity firms are outdated and inefficient, with many of them manual. PE firms can streamline workflows by using AI to automatically update these processes and facilitate the transfer of data instantaneously with little to no manual intervention.Performance Through Systems of Intelligence. AI can help private equity firms optimize the performance of their portfolio companies by analyzing large amounts of data and identifying opportunities for improvement. How to Contact PariPari's LinkedIn :  https://www.linkedin.com/in/parinatarajanzinnov/  

Matthew Carr is the Co-Founder and Head of Research & Technology at Atum Cell - a firm that provides leading-edge cybersecurity software, hardware, and services for companies and government agencies in North America and Europe. He is an award-winning cybersecurity researcher and penetration tester specializing in cyber threat management. He held senior positions in security at IKEA, IBM, and SecureLink, where he built a strong base of real-world experience.What You Will LearnThe Rising Number of Cyber Attacks on Private Equity Best Practices and Why All PE Firms Need to Build a Cybersecurity CultureCommon and Emerging Cyber Threats Currently Plaguing PE Firms Breakdown[00:45] Getting to Know Matthew Carr [02:13] Common Mistakes by PE Firms and Their Portfolio Companies [04:19] Types of Cyber Attacks Targeting PE Firms[07:51] Cybersecurity Threats and Vulnerabilities in Private Equity[11:22] How PE Firms can Build and Implement a Cybersecurity Culture[15:00] Easy Ways to Improve a PE Firm's Cybersecurity[19:26] Take This One Action Step to Protect Yourself Against Cyber Threats[22:45] Reasons Why Cybersecurity Awareness Training is Important[27:15] Matthew's Go-to Self-Improvement Resources[28:52] Parting ThoughtCommon Cybersecurity Attacks in Private Equity Although cybersecurity is a big concern in almost all industries, cyber attacks on PE firms have increased in recent years. Interestingly, the threats are not only a problem for firms with deep pockets but extend even to small upcoming companies. For a PE firm, data breaches can have business-ending consequences. For example, they spook investors, negatively impact valuations, and damage a firm's reputation. According to Matthew, these are some of the most common ways hackers target PE firms.●        Social Engineering - This is the simplest and most common attack in PE right now. Attackers use psychological manipulation to gain access to confidential information or resources.●        Known Vulnerabilities - Expert attackers leverage known vulnerabilities in a system to gain access to a PE firm's data. A typical loophole is outdated systems. Matthew explains that using outdated software presents numerous security vulnerabilities that put your data and business at risk.●        Zero-Day Vectors - Zero-day attacks stem from an operating system or computer software flaw unknown to the software's publisher. The term "Zero-day" is scary because it is unknown, and there is no patch or antivirus for this vulnerability.●        Zero-Click Attacks - These attacks are fully remote and provide access to a victim's data in real time and without any action from the target. Zero-click attacks are dangerous because they can take place without the victim clicking on a malicious website or app.Other Media ReferencesAtomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones by James Clear The Slight Edge by Jeff OlsonHow to Contact MatthewAtumcell.comMatthew's LinkedIn Matthew's email address - M@atumcell.com

Introduction to StephenStephen Madsen was the Director of Business Development & Capital Markets at Monomoy Capital Partners, a private investment firm with over $2.7 billion in assets under management. Monomoy invests in the equity and debt of manufacturing and distribution businesses that can benefit from operational and financial improvement. Stephen specializes in mergers & acquisitions, deal sourcing, private equity relationship management, and B2B relationship management. What You Will LearnThe Rise in Deal Origination in Private EquityWays to Build a Deal Origination Team From ScratchWhy You Need to Take Notes in Private Equity Breakdown[00:47] Introducing Stephen Madsen[03:48] Biggest Mistakes by PE Firms and Their Portfolio Companies[06:59] Why Deal Origination is Such a Big Thing in Private Equity[09:54] Should You Have a Separate Deal Origination Team?[14:03] Benefits of Building a Standalone Business Development Team[17:10] More Versus Less Information in Deal Origination[21:26] Steps to Forming a Strong Intermediary Relationship [25:13] ROI on a Typical Business Development Relationship[28:40] How to Measure the Success of Your Deal Origination Efforts[33:10] Taking Notes and Why It's Important [35:50] Things That Define a Top Performing Individual [38:17] What Stephen Likes and Dislikes About Private Equity[43:10] Parting Thoughts What is Deal Origination in Private Equity? Deal origination in private equity refers to the process of identifying, sourcing, and evaluating potential investment opportunities in private companies. This typically involves a combination of market research, networking, and outreach to entrepreneurs and business owners. The goal is to find businesses with attractive growth potential, strong management teams, and clear pathways to generating returns for investors. According to Stephen, deal origination is a key component of a private equity firm's investment strategy, as it helps them identify and secure attractive investment opportunities. Why You Need to Have Intermediary Relationships in Private Equity Intermediary relationships in private equity are important because they provide access to a wider pool of investment opportunities. Stephen explains that they also help build a strong network of contacts. Intermediaries often have deep connections within the business community and can help private equity investors identify attractive investment opportunities they may have yet to be aware of. Additionally, these relationships can provide valuable insight into industries, market trends, and other factors that can impact investment decisions. Stephen believes these types of relationships can make or break the chances of a PE firm achieving long-term success.  How to Reach TimStephen's LinkedInMonomoy Capital Partners ​​Thank you for tuning in!To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.