10+ hours of podcasts, in 5 minutes.
12 quotes from 2 episodes on Private Equity Funcast, each with a timestamped link to the source.
Testing diligence assumptions against customer conversations guides private equity operations, Paul Stanzic said. Senior debt sits at the top of the capital stack, dictating what cash reaches equity holders, Paul Stanzic explained.
Asking sponsors how teams got paid during sub-target exits reveals whether incentive equity functions when deals struggle.
“Tell me about a time when you had a tougher deal and the team came in and did a good job and it didn't quite get to outcomes for the incentive equity, but they were selling to another private equity firm in a strategic and they still got paid. How did that work?”
Direct customer interactions expose pricing snags and frequent competitor mentions that sponsor models overlook.
“…what the moments look like where a customer gets excited or the competitor that keeps getting mentioned or the snag and pricing that comes up.”
From Why PE Operating Partners Must Join 20 Live Sales Calls Post-Close
Debt sits at the top of the capital stack. Paul Stanzic said an executive's layer in the stack determines bank account payouts at the end of a 5-year run.
“And it does not mean you get half a percent of every dollar that comes back when you sell the business because of that progression or the word that gets thrown around a lot. You've seen our lingo episode is the stack, right? The debt is the top of the stack.”
From Why a 1% Equity Pool Slice Yields Far Less Than Expected
“It that pays to understand that and to ask like what part of the stack am I in and what percentage am I getting of that part because that's what dictates what shows up in your bank account at the end of that 5-year run.”
From Why a 1% Equity Pool Slice Yields Far Less Than Expected
Requesting good, better, and best cases reveals whether sponsors evaluated multiple outcomes, Paul Stanzic said. Asking multiple people highlights whether hurdle targets depend on extreme performance multiples.
“Make sure you get the good, better, best because if it's one case and this is what we're going to do, then it's like okay well what if we don't do that? Just a little bit of sensitivity proves that the person has thought about it.”
“Another one is just like if the hurdle seems really really ambitious. If it's all performance vesting and the performance vesting is some crazy multiple on where they're at today.”
“If possible, I think it's a good idea to ask that question to more than one person…”
High-frequency operational data exists to spark clear conversations, Paul Stanzic explained. Missing metrics alert teams to infrastructure problems across RevOps and demand generation software.
“I like to say data is only as good as the conversation it creates. Our intention is to create very high quality but very easy to produce very high frequency reporting that tells us exactly what we're doing, how well we're doing it, where the challenges or opportunities might be, and what we can do next.”
From Why ParkerGale Scraps 20-Tab Spreadsheets for Weekly GTM Cadence
“You're going to notice things in the data that point to infrastructure issues in your RevOps, whether it's your CRM or demand gen systems, that tell you, 'Well, we actually can't give you that metric because this thing over here is screwed up.' Okay, cool. Let's go make a plan to fix that thing.”
From Why ParkerGale Scraps 20-Tab Spreadsheets for Weekly GTM Cadence
Rigid value creation targets often clash with weekly business emergencies. Paul Stanzic noted that this distraction leaves teams playing whack-a-mole without building conviction.
“And I think when we're doing it poorly, we get into this weird zone where we're like rigidly focused on the value creation plan, but then we're letting the inevitable whirlwind of the business and the fire drills that come up every single week kind of distract us. And so you end up playing a little bit of whack-a-ole, but you never get that conviction that like, okay, we got something here.”
From Why Year-One PE Value Creation Requires In-Person Board Bravery
“The mental framing has to be coming out of diligence: 'I think this is what I think,'”
From Why PE Operating Partners Must Join 20 Live Sales Calls Post-Close
“In the first six months of an investment, I should have on my United app three or four flights to that company or I'm probably screwing up…”
From Why Year-One PE Value Creation Requires In-Person Board Bravery
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The week's private equity podcasts, boiled down to one short Sunday read, for deal professionals, operating partners, and LPs.
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