Last night I got a DM from a CEO of a private equity portfolio company.
His company recently sold from one PE firm to another and he rolled 100% of his equity - $8 million - into the new deal.
They are missing the yr 1 forecast and he’s feeling pressure from the PE firm.
His question is a common one I get- what do I do when the business isn’t performing?
In that scenario, PE is going to look to management for an explanation.
Below is my response to him. What would you add?
Well any manager who is so convicted in the future that he rolls 100% is someone whose hard to argue with…
I know how PE works. Unrelenting pressure for results right now. And frankly, they want to see growth yr 1 bc they’re also emotional animals who want to feel good about their decision to buy the business.
One thing they will not abide is complacency. They want action.
So consider this… can you identify KPIs beneath sales/profits that are trending well and indicate a strong future? If not, put together an action plan to address what’s gone wrong and double down on what’s going well. Remember, they want to know you’re hyperactive and concerned about their success- and their success is 3-5 years, not long term.
Lastly, remind them that your money is where your mouth is. You rolled and your wealth is tied up in the success of this business. You would not be taking this path if you didn’t believe.
Hope that helps. Good luck to you.
Today in 1994 marked what we in the Baltics 🇪🇪🇱🇻🇱🇹 can call the real end of the Second World War.
It was the day russian troops finally left Estonian and Latvian soil. 54 years after they first invaded.
“Today signifies the end of the saddest chapter of our history,” said Estonian President Lennart Meri on this day 32 years ago. We had survived more than half a century of occupation and repression. We had restored our independence, and finally, the russian troops — responsible for so many crimes against our people — were no longer here.
The diplomatic negotiations to achieve this were not easy. When Estonia restored its independence in 1991, there were approximately 570 Soviet military sites and some 35,000 Soviet troops in a country of around 1.3 million people.
russia initially wanted to set 2002 as the final deadline for the withdrawal of its troops. This was not acceptable to Estonia. For us it was was extremely important that russian troops leave Estonia at the same time as they withdrew from many other places, primarily Germany, where the deadline for their departure was 31 August 1994.
Estonian diplomats achieved this with strong international support from many countries that are now our Allies in NATO and partners in the EU — institutions we worked hard to join in 2004 to ensure that we are #NeverAloneAgain.
Met a German founder this week and asked him if all the stories one reads about the challenges of startups in Germany are exaggerated. "No, they're understated." Proceeded to describe spending a full day having a 90-page investment contract read to him (mandatory under German law; § 13 BeurkG) by a notary that then charged €30,000. That was for his first company. His second company, needless to say, was not incorporated in Germany.
A Japanese designer created pixelated bandages that make cuts and scrapes look like they’ve been censored in a video game.
The transparent patches use blocks of reds and pinks to recreate the familiar mosaic effect seen in Japanese media. 🩹
Worms are back and are taking an explosive leap into tactical 3D roguelike combat! 🪱
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