Time is money, or so the saying goes, and it couldn’t be more true in the world of private equity. You’re constantly faced with competing priorities, and on the hunt for a faster way to evaluate deals in your pipeline while also drumming up future deal flow. Phone conversations with your trusted advisors only go so far; to be successful, you need to source advice from beyond your firm – you could hire a human capital firm. It’s one solution that will relieve the pressure, and will quickly get you the quality insight you need.
Consider the following two scenarios:
Scenario 1: It’s Monday morning, and you have just wrapped up the deal review meeting. You pored over the books of live deals with your team, and a handful stands out as ones that may have merit. You need to narrow down the list so you can present the best, most viable ones to management. You’re torn. You begin researching an aftermarket auto company, but while your research is underway, competitors gain unique insight into the second company on your list, one that provides software solutions to fast-food restaurants. In the time it takes you to identify and contact the best advisors to help you thoroughly analyze the aftermarket auto company, you’ve lost precious time researching all the other potential deals on your list, giving your competitors a head start.
Scenario 2: You’re flying back from a business trip to L.A. On the airplane, you flip open a copy of Forbes magazine and read an article that talks about how artificial intelligence will continue to drive the customer experience. You get excited about AI, and wonder if the thesis is indeed accurate. If so, you want to know more about the types of AI deals, and in what sectors, it might make sense for your firm to pursue, and when.
In both scenarios, time is of the essence. Success depends upon being ahead of the competition with a valid thesis and solid contacts in a given industry. In the first scenario, you can’t waste time on a deal that’s going nowhere. You have to quickly evaluate the merit of Deal A, and then move on if it’s a dud. In the second scenario, you need to efficiently determine whether the thesis is sound, if pursuing an AI deal makes sense, and if so, the best area for your firm to target, and when.
Hire a human capital firm for a more efficient process
Senior associates at some private equity firms spend countless hours trying to identify and connect with expert advisors, taking initial calls to evaluate whether an advisor is the right fit, and prioritizing advisor research. Too much time is wasted.
Other PE firms might outsource part of the job to an Expert Network (EN), however, that comes with its own challenges and constraints. Many ENs follow a credit-based model that could lead to holding back on a call in order to save money. That could jeopardize the quality of advice received, and in the end, negatively impact the investment decision. If you hire a human capital firm, like Apex Leaders, you can alleviate both problems.
By offering unlimited engagements with advisors, or a so-called “buffet offering,” Apex Leaders eliminates constraints and makes it easier for PE firms to quickly connect with the right advisor. You won’t miss out on a call with a potentially essential expert because you’re worried about costs stacking up. You will work through your priorities faster, and in greater depth. You will be able to quickly evaluate sector theses, and in the process, you will build an expansive network of vetted and trusted advisors you can depend on.
At Apex Leaders, we:
- make the due diligence process more efficient by taking work off your plate,
- screen advisors and identify ones who are best positioned to help,
- provide access to greater knowledge with fewer calls,
- help expedite the process of getting to a yes or no.
A data-driven approach
For a PE firm, you’re well aware it’s not uncommon to evaluate around 1,000 investments in a given year. Of those, you might help shepherd a few hundred investments into discussion at the Investment Committee. Perhaps 30 of those will make it to the final stage, and in the end, a small handful will be completed investments.
If you hire a human capital firm, as soon as you’ve prioritized the opportunities you want to investigate they will help accelerate the pace of your due diligence and the timeliness of your decisions. It will help you more efficiently evaluate the pros and cons of an opportunity and determine whether a given deal truly fits within your firm’s investment strategy.
At Apex Leaders, we’ll start running on a request, freeing you up to prepare for the next priority. We take a data-driven approach to find the right advisor to educate your deal team on the nuances of a given investment.
It’s simple: when we do the vetting for you, you have more time to dig deep into the most relevant conversations. When you choose the faster way to determine if a deal has potential or when to walk away, you’re expediting the process of bringing deals to a successful close.
Invest or Walk
Adopt a sector thesis approach to thrive in technology dealmaking