Key Takeaways

  • Software returns have shifted entirely from multiple expansion at entry to operational execution during the hold period.
  • Resurgens Technology Partners balances its 45 to 50 person firm with an exact 50/50 split between traditional dealmakers and dedicated operating professionals.
  • Internal value creation models fail when firms treat operators as second-class advisors, creating agency conflicts between investment committees and management teams.
  • Talent planning must run on multi-year cycles rather than reactive executive searches when portfolio executives quit.
  • Resurgens structures its operational bench using the Resurgens 5-Bucket Value Creation Team Model.

The Resurgens 5-Bucket Value Creation Team Model

1. Multi-Time CEOs

Been-there, done-that veteran operators who have run companies multiple times and bring high-level executive leadership and strategic guidance.

2. Subject Matter Experts (SMEs)

Deep functional domain leaders (such as former VP of Sales, CMO, or Head of Product) who engage with portfolio companies specifically within their domain of expertise.

3. Value Creation Directors / Athletes

Cross-functional operators responsible for quarterbacking the full value creation plan across multiple disciplines rather than a single domain.

4. Analytical Support Associates

Data-crunching analytical resources that act as the hands and feet of a portfolio CEO when complex modeling and data analysis are required.

5. Dedicated Human Capital & Talent Team

Specialized team focused solely on human capital, handling people ops systems, executive recruiting, and proactively mapping 3-year organizational talent gaps.

When This Works (and When It Doesn't)

This structure works best in lower middle-market software buyouts where portfolio executive teams have technical domain expertise but lack enterprise scale experience. Founder-led software firms regularly stall out between $10 million and $30 million in ARR because their internal operational infrastructure cannot support complex go-to-market motions or international expansion. Placing analytical associates and functional domain experts directly beside existing management removes operational friction without forcing immediate C-suite turnover.

It breaks down when private equity firms apply this model without resolving the underlying governance incentives. If the deal partner controls compensation and exit timing while the operating partner carries accountability for operational milestones, portfolio CEOs receive contradictory instructions. Filipovic notes that internal operating efforts fail unless decision-making is unified: “Our decision making process is predictable, stable, coherent, sensible. You're not dealing with the agency issues and they're everywhere now.” It also fails in smaller sub-$200 million funds where management fees cannot support a 50-person headcount.

Why It Matters

Software valuations no longer bail out passive investors. With AI reshaping software pricing models and multiple expansion off the table, the spread between top-quartile and bottom-quartile fund returns now tracks post-acquisition execution speed. Lower middle-market sponsors cannot rely on external consulting firms that parachute in for 90 days and leave slide decks behind. Building a permanent 50/50 operating bench signals that value creation is an institutional product, not an ad-hoc intervention.