Private Equity's Rising Emphasis on Profitability
News, insights and updates from the team at Bloom Equity Partners
Happy Friday fellow technology investors and operators.
We’re back with The Weekly Bloom - a must-read for investors, operators, and founders navigating the world of software private equity. We hope that you enjoyed last week’s newsletter on PE Consolidations in Tech.
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Macro Uncertainty: Private Equity's Rising Emphasis on Profitability
With rising interest rates and 40-year high inflation, the uncertainty surrounding value is at an all-time high. This has forced investors to change their priorities and focus in order to adapt to market conditions.
A recent study by The Middle Market found that over 60% of private equity firms surveyed now prioritize profitability over revenue growth, with a focus on cost-cutting measures and streamlining operations to improve bottom-line results. This is a marked change from previous years when many firms were solely focused on growth strategies such as expanding into market expansion and aggressive M&A playbooks.
However, the current economic landscape presents opportunities for those who are willing to look. The focus has now shifted to the middle market, with an increased number of add-on investments and bolt-ons.
Firms are shifting their focus towards cost-conscious investments that boast a strong track record of profitability and cost-effectiveness. With surging overhead expenses, ballooning costs, and shrinking profit margins, a cost-benefit analysis will play a pivotal role in their decision-making process.
Bloom Equity Partners Approach:
At Bloom, our approach to scaling technology businesses has been honed over many decades of experience.
Led by a team of technology focused investors and industry operators, Bloom provides the capital, operational resources and playbooks in recession resistant businesses to rapidly unlock transformational growth and deliver superior risk-adjusted returns to our investment partners and management teams.
If you or someone you know is considering selling or taking onboard a majority investment and active partner for the next chapter of growth, we might be able to help out. We also just launched our referral partner program! If you want to be compensated for sharing investment leads make sure to join.
Software Sales Leadership: CRO Best Practices
In a recent post Mark Kosoglow, CRO at Catalyst Software, shares his learnings from expanding catalysts sales pipeline coverage from 1.9x to 2.2x in Q1:
Key learnings for software operators
Rigorously clean up your pipeline.
Identify your “must-have” deals.
Start a Winter League (2 mtgs/week with reps, leadership, product, success, etc.).
Follow the 20/50/100 pacing framework.
Start a two week countdown at the end of each quarter.
Source: GTM Newsletter
You can check out the full post: here
What We’re Reading and Listening To…
The Chief Reminding Officer: How Bain & Co. Built a Culture on Simple Cues
Linear #005: Sales Hacks, The Story of Zoho, & How To Build a BIG vSaaS
Deals From Across The Industry
Event software firm Cvent Holding explores sale
Broadcom chief Hock Tan seeks more acquisitions after $69bn VMware deal
Silver Lake considers Qualtrics takeover
Diversis Capital-Backed Fishbowl Inventory Acquires Sellware
Bloom Equity Partners is Hiring: Operating Partner
We are excited to be building out Bloom Equity Partners' internal consulting group.
This effort is to support our goal of providing stage-appropriate strategic and tactical advice to the management teams that we are fortunate to partner with, on our quest to develop already great companies into market leaders.
We're looking for folks with decorated experiences as a CEO/COO/CRO/CFO, specifically with LMM B2B Technology companies ($5-50m in revenues). We are open to flexible arrangements (full-time, part-time, or contract).
Please reach out if there's a fit or if you would like to learn more.
Reply to this email and we’ll be in touch.
Here’s the link to the job posting: Operating Partner
Favorites from the Ecosystem
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Operators….
End Note
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Great content, per usual keep it up