The PE Mindset

Insights from the Bloom team 💡💡

Happy Friday Founders & Friends!

At Bloom VP, community is key!

Whether it’s The Full Bloom podcast, The Weekly Bloom newsletter, interviews, or the team's active presence on Twitter, our goal is to provide value to readers like you. 🗞️🗞️

In this week’s newsletter, we wanted to highlight an insightful tweet from Ryan Khan (Associate @ Bloom VP), which speaks to the impacts of adding constraints to a businesses’ management team;

Ryan K @r7_khan

The mind does wonderful things when there are constraints or (-) implications. I think adding a responsible level of debt does a lot of good to a management team. They have a limited amount of cash flow to burn and their decisions need to be right.

Ryan K @r7_khan

The management team will think twice about an investment before they make a move. They will always have to keep an eye out on cash flow to ensure covenants and cash flows are sufficient to cover overheads and debt. I am a fan of putting responsible constraints on the mgmt team.

and the benefits…….

Ryan K @r7_khan

It gets them to think more creatively. Heck, this might even push them to inherit the private equity mindset. PE mindset is a wonderful way to think about creating value for your shareholders even if you are not backed by a PE firm.

As Ryan noted, the 4 parts of a PE mindset/playbook:

1. Set a quantitative goal for 3 to 5 years time horizon

2. Build a detailed plan

3. Create incentives to align everyone

4. Build a result-oriented organization (or result-oriented mindset)

This playbook can be applied to any business and when implemented properly can reap tremendous benefits.

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What We’re Reading and Listening To…

📚 6 CEO Skills Prized by Private Equity Firms

📚 Working Capital: Bodies, Blood, and Buckets

Favorites from the Ecosystem

Investors👇…..

Enrique Abeyta @enriqueabeyta

Legendary hedge fund TIGER Management created an "Investment Framework" to guide it's company research. This was later adopted by the amazing funds that make up the Tiger Cubs. Can't remember where I got a copy 20 years ago but here is THAT checklist. Part ONE today. 👇👇👇

Lindsay Knight @lindsayknight

Been noticing more and more @VCPlatform professionals (like myself 🙋‍♀️!) taking on IR and Fundraising responsibilities. Sharing some tactical high-level tips from a community braintrust call (with former LPs and full-time IR folks) earlier this week cc @Open_LP #OpenLP 👇

Founders👇……

Bart Macdonald • Bloomvp.com @BartMacdonald

Good take. Austen's correct: many, many B2B software markets have room for waaaaaaaaay more than one player. Very infrequently it's 'winner take all', but perhaps the top 2-4 vendors takes 50-80%.

Austen @Austen

The first time somebody told me about Zapier I said, "Yeah but this seems like a solved problem; there's already IfThisThenThat." 1. I was stupid 2. Some markets have room for waaaaaaaaay more than one player 3. Execution matters a whole lot

Andreas Klinger 🏝 @andreasklinger

A friend of mine is joining a breakout hypergrowth startup. Here is the advice I sent to him via email Sharing the in hope that it's useful to others as well 🙏 LMK what you think. ✌️ klinger.io/post/654608607… 👊

Operators👇…..

Jason ✨BeKind✨ Lemkin ⚫️ @jasonlk

WalkMe IPO'd this week at $200m ARR, growing 29%, and settled at a $2.5B market cap More than most SaaS companies, WalkMe is a lot like you and me 5 Interesting Learnings: ⬇️⬇️⬇️⬇️⬇️

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News from the Industry: deals, deals, and more deals 💰

KKR to acquire edtech company Education Perfect

Vista-backed Granicus acquires SaaS GovTech Leaders

PE-backed Constant Contact acquires SharpSpring

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End Note

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