Hot off the press! My new book for private equity leaders just dropped.

TL;DR -- I wrote a book for private equity professionals and PE-backed operating executives to help them nail value creation in their portfolio companies. It launches today. Check it... ya know, if you're into that sorta thing.

Grab a copy on Amazon here, and visit WinningMoves.co for more.

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After 12 months in captivity on my/my editors' hard drives, this week I'm officially releasing my new book into the wild:

Winning Moves: 105 Proven Ways to Create Value in Private Equity-Backed Companies

(*jazz hands*)

No one is more biased towards a book than its author, but I'm as convinced now as I was the day I first put pen to paper that the private equity space needs this book now more than ever. So much so that I spent a year's worth of late nights and precious weekends diligently writing it.

Here's why.

WHY I WROTE THIS BOOK, AND WHY IT SHOULD MATTER TO YOU

To understand why this book's topic is so relevant to the private equity world today first requires that we understand what's actually going on in the private equity world today...

Despite the slew of juicy, record-breaking, headline-making private equity exits over the last 24 months, the reality is: it is tough out there for PE investors and PE-backed companies. And it's getting tougher.

Here are the facts:

The amount of dry powder (committed, but uninvested capital) in the market has doubled in the past 7 years.

And today, there are 2x the number of private equity firms (roughly 6,000) as there are counties in the United States. It is an astonishing stat when you stop and think about it.

What's more, although the supply of private equity capital has grown at a roughly 15% compound annual growth rate since 2014, the investable universe of small/mid-sized U.S.-based companies (20–500 employees) has grown at a paltry 1% CAGR over that same period according to the SBA.

The upshot of all this: Today in the PE space, there is an abundance of capital across throngs of well-capitalized firms, and a relatively fixed universe of target companies for them to deploy that capital into.

Apply a bit of basic economic logic to the staggering growth in the supply of private equity capital and the more constrained demand for that same capital, and the conclusion becomes self-evident: it has become brutally competitive in the middle-market PE world.

Any PE professional who finds themself locking horns with a dozen other buyers in a highly competitive M&A process knows this firsthand. Any PE exec who has to sign up for increasingly aggressive growth targets in order to live up to investors' return expectations is also feeling the heat.

And in this hypercompetitive, dog-eat-dog era of private equity, long gone are the days of being able to cost-cut, or financially-engineer, or value-buy your way to outperformance. The private market has simply become too efficient.

For PE buyers in this environment—marked by tons o' competition and historically high purchase multiples—nailing post-closing value creation is increasingly important to delivering on LP return expectations and outperforming the field.

In their 2021 Global Private Equity Report, Bain & Company describes why simply:?

“The simple math says that [general partners] buying companies at these prices will have to generate more value if they are to make good on [limited partner] return expectations—and they will have to do so in a highly volatile and uncertain business environment.”

The "...will have to generate more value if they are to make good on [limited partner] return expectations..." part is the key. Today, nailing post-close value creation has come to the fore as one of the most important keys to success in this era of private equity.

But here's the thing: as a survey from PWC reveals, 4 out of 5 private equity professionals said they need to improve their value creation planning and practices.

I saw this firsthand as I started Accelera Partners 18 months ago (following a 14-year career as a PE investor / operator myself) and began talking and working with more private equity groups and their companies. I quickly began to notice two things that brought this "4 out of 5" stat to life:

#1 - I noticed that too many firms are reactive, unstructured, or haphazard in how they approach post-closing value creation... and they pay the price. Some firms—the self-described "deal shops"—risk getting so caught up in the deal-making action that they lose sight of the importance of post-closing value creation. As one such investor revealed in a moment of honesty, "We're deal guys at heart. Once we close a deal, we're kind of just on to the next one. And we sometimes take our eye off the ball on value creation."

Other firms simply lack the resources, tools, or expertise to nail value creation with consistency. One PE friend fessed-up, "We need to shift from reactive to portfolio company issues... to proactive about driving value creation."

For firms like these, the reality is that in this era of private equity, those investors who fail to take an intentional, methodical approach to making value creation happen in their companies are bound to invest less confidently, lose precious time post-closing, and ultimately put their performance in jeopardy.

And among executives of PE-backed companies, those who lack a deep understanding of the levers to pull to create equity value—and aren't carrying an arsenal of "winning moves" for doing so into post-closing battle—put their own success and their investors' returns at risk.

However...

#2 - On the flipside, I noticed there are a handful of firms that are doing this really well—systematically unlocking value in their portfolio companies—and reaping the benefits. These are the 1 out of 5 from the PWC study. And there's a lot we can learn from these "leader" firms (as I refer to them in the book) and their operating executives about the practices they’re using to generate loads of equity value proactively, methodically, and predictably.?

Eventually, after enough meetings with firms who confided in me the need to raise their value creation game, it clicked:

By leveraging my own experience as a PE-backed executive and investor and tapping into the wisdom of these leader firms, we can help the 4 out of 5 PE leaders who struggle with value creation to be more successful and generate better returns by tapping into tried-and-true "winning moves" of value creation.

...and with that, the idea for Winning Moves was born, on my digital notebook following a day of meetings with PE firms. →→

During the 12 months between that lightbulb moment and today, I've interviewed dozens of leading private equity investors and executives with over 1,000 years of combined experience—including over a dozen operators who have generated a greater-than-10x return on capital (who I admiringly refer to in the book as "10-Baggers").?I asked each of them a simple question:

What are the most potent, powerful, and equity value-generating "winning moves" that have contributed to your value creation success?

And I got to work transforming 50 hours of raw call transcripts, binders full of research, and my own 15 years of experience as a PE investor and executive into this ??

(Uh... the book, not the toddler.)

HOW THIS BOOK CAN HELP PRIVATE EQUITY LEADERS

I wrote this book to share with fellow private equity leaders like you the winning moves you need to nail value creation in your portfolio companies... and in doing so, help you to:

• win more deals. By developing a clear, well-validated, and high-confidence value creation plan pre-closing, PE investors can (1) become the favored bidder in the eyes of continuing management, and (2) give your deal team the confidence they need to pay up if the value creation potential is there to justify doing so. These factors combined can create a real buying advantage in this market.
• avoid overpaying. Investors can manage and mitigate the potentially costly risk of overpaying by having a clear and confident value creation plan going into final bids.
• make value creation happen faster. Time is money in private equity deals, and this book will equip private equity leaders with an arsenal of proven, value-unlocking, return-generating winning moves they can use to accelerate value creation.
• take your career to new heights. At the end of the day, a private equity investor or executive's career success is a function of the amount of equity value they create in their portfolio companies—plain 'n' simple.

As a preview, Winning Moves:

• deconstructs value creation into the 5 primary levers that drive it to help you think more clearly and systematically about how to create value in your portfolio company(s);

• equips investors and executives with a vast arsenal of proven, actionable winning moves—105 of them to be exact—that PE-backed businesses can use to unlock equity value in these 5 areas;
• dives deep on the two foundational "meta-levers," as I call them, that are simply essential to value creation success (Spoiler Alert: they are team and culture); and
• arms private equity professionals and executives with a blueprint for taking everything we cover and applying it throughout the deal life cycle to make value creation happen.

WHAT OTHERS HAVE HAD TO SAY ABOUT THE BOOK

We've heard great feedback from the ~20 folks who test-drove the book prior to launch, things like:

"Fantastic stuff.? Probably one of most practical PE books I have read and will be recommending to other search fund principals I know." (search funder)

"Pages marked after a 1-hour flight: (Attached picture of a heavily sticky-noted and dog-eared copy of the book →) Lots of thoughts/ideas jumping around in my head." (former private equity CEO and investor)

"You’ve broken down a complex topic into simple, approachable, and easy-to-understand bits.?Very well written.?Bravo!" (PE professional)

"I can see this book getting tossed around at a search fund conference like a beanbag at a tailgate party :-)" (search fund investor)

And I feel honored to count some of my author heroes among the supporters of this book:

Dr. Geoff Smart, Chairman and Founder of ghSMART and New York Times bestselling author of Who (the book that's had the greatest impact on my private equity career) had this to say about Winning Moves:

"In Winning Moves, Dan Cremons provides practical and sometimes counterintuitive advice about how to build valuable investor-backed companies. Spoiler alert, it’s as much about getting the 'who' right as it is the 'what!'"

Adam Coffey, 6x Private Equity-Backed CEO, and Bestselling Author of The Private Equity Playbook (the book I've gifted most to business owners who are new to private equity) and The Exit Strategy Playbook, said:

"What an invaluable book for private equity investors and executives. Well-researched, practical, and actionable. Winning Moves is a must-read for private equity leaders who aspire to build enduring businesses that generate great returns."

Kimberly Powell, co-author of the New York Times bestseller The CEO Next Door (the book I've gifted most to PE CEOs), founder of LeaderScale Advisors, and Operating Partner at Resolve Growth, had this to say:

Dan Cremons has solidified in a practical way what truly makes a difference in value creation. I can see Winning Moves becoming the new go-to guide to value creation for investors and operators who are seeking to up their game.

But don't take it from them or me. Click here, grab a copy, and see for yourself.

#ValueCreation #PrivateEquity #WinningMoves