Three Valuable Tips for PE-Backed Executives to Improve Career Networking

PE-Backed Execs are the Professional Athletes of the Business World! They are uniquely skilled at creating and adding value in a very short timeframe. And they have a unique set of stressors, quandaries, questions, challenges and concerns. To further complicate matters, the average tenure of a PE-Backed Executive is only three years! This means that the most savvy, experienced executives begin to network and search for the next jobs, literally on Day One of their current jobs!

In addition to simply getting out there, cold calling and networking private equity groups, we have identified three valuable and useful tips to find your next PE-Backed role.

  1. Join a supportive, collaborative community of your peers, such as www.TheOperators.pe
  2. Develop an Investment Theme or Thesis and share it with PEGs as a key component of your outreach.
  3. Redefine how you think of your role, title or value add to private equity funds.

TheOperators.pe is a member-based, peer support community for PE-Backed executives. Through the website, you can sign up for networking events with peers and with PEGs. You can also post questions that will aid in your career generally and in your search for your next role, more specifically. And through the website you can join peer advisory groups, some of which are designed specifically for those in periods of career transition!

Investment themes and theses are highly useful for private equity investors in differentiating, demonstrating value and focus for limited partners, sourcing deals, and communicating market understanding and long-term vision to sellers in order to win more deals. As an Operator, having your own point of view, or perspective on an acquisition theme, can be extremely valuable in opening doors for you. You can use your theme as a way to demonstrate knowledge, value, analytical skills, and relevance. Not only might your theme gain you meetings with more PEGs, but it might actually cause the PEG to re-think, or develop a new investment strategy, which will mean that they will keep you close until they find a relevant deal for you.

The process of developing an Investment Theme need not be overly complicated. Start with a macro trend or development that expands well beyond a single company or industry (examples include aging of baby boomers, machine learning, climate change, etc.). Themes could also involve short-term policy shifts and unforeseen developments—a global pandemic, supply chain challenges, or inflationary pressures. Consider what you know most about in terms of companies, markets, and their opportunities and drivers, customers, channels, customer unmet needs/interests, technologies, competitor capabilities and intentions, etc. Now, play with those macro trends and developments within your areas of expertise, and create scenarios describing how the trends could impact the segments you best understand. With each scenario, think about sectors, segments, channels, and even companies that would be clear winners or losers.

The definition of an Investment Thesis, which takes the process one step further, is to prioritize specific segments and ultimately, specific acquisition targets, based on tangible data. You do not need to have a fully-baked Thesis, a draft version of a higher-level Investment Theme is sufficient to engage in meaningful conversations. It will open doors for you.

Do not limit yourself to the title you hold. In other words, if you are a widget industry COO, try not to fall into the trap of only thinking of yourself as narrowly as “I am a widget industry COO.” As you conduct informational conversations with Private Equity Groups, and hopefully have opportunities to share your thoughts on a relevant investment theme or thesis, consider how many roles may be good fits for you within these PEGs. Particularly if you are in-between full-time roles, think about the following opportunities:

  1. Executive in Residence — Some funds have this role, other funds refer to the role by other names, and still other funds have no such job function. At the risk of oversimplifying, you can think of a Bench of Operators who may be called up to take on a role with a portfolio company, or potentially with the fund.
  2. Interim Executive — As you begin to establish strong connections and rapport with a particular PEG, you may be looking for ways to remain relevant. If the “Executive-in-Residence” concept is not leading to obvious future paths, consider offering to help out portfolio companies on a short-term basis. You may be called upon to help fix a specific problem, or more likely, to serve a stopgap role in the event of a sudden, unexpected loss of a key employee. Ask about challenges, quandaries, problems they are experiencing with portfolio companies. You may be able to help in area of dire need! Obviously, you will know at the outset that the role is only an interim one, but you will be testing the chemistry, proving your value, and remaining top of mind in case something more permanent surfaces.
  3. Fractional Executive — Some fractional roles are interim; others are long-term; some lead to full-time roles; and some fractional executive roles cease to exist on very short notice. The concept is that some companies (and some PEGs) are not large enough to justify a full-time position in a particular functional area (Marketing, Strategy, Talent are common fractional roles). Those hiring a Fractional Executive understand that they will have access to that executive for a certain portion of time (a certain “fraction” of their available hours), and that the executive will be busy with one or more other clients the rest of the time. 
  4. Industry Expert — Most PE-Backed Executives whom I have met are a lot less arrogant and more down-to-earth than their public company brethren, so calling themselves “Experts” may not come naturally. But think about it, most PE Groups invest in obscure, niche sub-segments that they may never have heard of or thought about before. If you have spent your career, or even a small portion of your career, as an Operator in the space, you are most definitely an Expert to them. This becomes highly relevant during the quick, stressful research processes that occur during the Pre-LOI and Post-LOI stages of due diligence. More specifically, you can be highly relevant and helpful to them in commercial or market due diligence. Online marketplaces exist for private equity groups to search experts, so look into becoming affiliated as a third-party with them. Serving in a due diligence capacity is another way to test the chemistry, build rapport and establish lasting credibility. As a one-off, project expert, you could play a support role for a consulting firm or the internal PEG deal/diligence team.
  5. Consultant — The commercial or market due diligence work is most commonly conducted not by individual experts, but by consulting firms, who may add a 1099 contractor (such as yourself) for a specific engagement. Working as a consultant gains you exposure and additional problem solving case experiences in a short period of time. In addition, you may have luck positioning yourself to serve as a consultant for a PEG for any number of purposes, ranging from diligence support, as described above, to channel strategy, Go To Market strategy, Operational improvement, etc.
  6. Operating Partner — If your experiences have been in companies with EBITDA levels north of, say, $20 million, you may be well qualified for this “dream” role in lower middle market funds. Again, some Groups have different names for the role, and some PEGs have no such role. Operating Partners are typically not on the deal team (though there are exceptions) and are not Board Members (though there are exceptions), but rather are thought of as coaches or experts. They have significant Operator experience. So much so, in fact, that they are expected to serve as sounding boards or thought leaders for management teams. And they do so with, typically, with a fairly focused mandate: The Go-To-Market Operating Partner, for example. Or, the Food and Beverage Operating Partner. Or the Turnaround CFO Operating Partner. Because the role tends to be more coaching and advisory, and typically involves fewer hours and less stress, some describe the role as The Dream Job in private equity.
  7. Board Member — Similar to the Operating Partner role, if you have deep, C-level experience in large portfolio companies, consider offering to serve as a Board Member for smaller companies. Obviously, the more targeted you can be, the better. “I have highly relevant experience in the niche market segment of your Portfolio Company XYZ, as I served as CEO of the industry leader for five years…I would welcome an opportunity to discuss serving on the Board.”

The point of all of these functions or roles is simply to have meaningful options to explore, that may pay handsomely, while you position yourself well for the next full-time role of your dreams.

In conclusion, be targeted in your networking, arm yourself with perspectives and ideas of your own (investment themes and maybe even investment theses), collaborate with other Operators, find as many Networking events you can to participate in them with PEGs. Best wishes in your pursuits!

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