Shareholder Value Creation Techniques

Value creation in a private equity environment revolves around systematically enhancing a portfolio company’s performance to achieve strong returns at exit. In my recent role as Go-to-Market Advisor for a cutting-edge AI-led health tech startup in the UK at Series B, I developed a comprehensive commercial strategy that rapidly boosted recurring revenue by 30% within 12 months. A key breakthrough emerged when we discovered extended integration timelines were deterring smaller clinics and hospital networks from adopting our solution. By designing a flexible onboarding framework, we reduced implementation time by 40% and reinvested these savings into predictive analytics features—enabling clinicians to forecast patient needs and administrators to allocate resources more effectively. Here’s a concise six-step roadmap for delivering tangible results: 1. Due Diligence: Pinpoint growth levers and operational bottlenecks pre-acquisition. 2. 100-Day Plan: Establish quick wins—revamp pricing structures, refine workflows, and optimise early partnerships. 3. Organisational Excellence: Assess leadership, align incentives with performance outcomes, and foster a culture of continuous improvement. 4. Accelerated Growth: Perfect go-to-market strategies, drive product innovation, and explore targeted acquisitions or strategic alliances. 5. Ongoing Optimisation: Monitor KPIs rigorously, remain agile, and leverage real-time data insights to pivot swiftly. 6. Exit Preparation: Ensure robust financial reporting, demonstrate sustained operational gains, and plan a smooth transition for new owners. Throughout each phase, transparency and collaboration are vital. Regular, data-driven updates to board members, management teams, and front-line staff help secure buy-in and maintain accountability. Ultimately, true value creation goes beyond financial engineering. It’s about generating sustainable growth, driving innovation, strengthening the organisation’s culture, and positioning the business for long-term success. By following a deliberate plan and staying laser-focused on top-line expansion and bottom-line efficiency, we set the stage for a transformative exit that benefits stakeholders and the broader healthcare ecosystem alike.

Case Study: We recently worked with a SaaS business at a critical inflection point —the executive team knew they needed to transform their business to stay ahead, but they were grappling with a complex technology and data environment making it difficult to optimize their finance function and gain visibility into fundamental performance KPIs. Here's how Celeborn Capital approached the challenge: 1️⃣ Uncovered Critical Insights: We dove into the company's financial and operational data to identify KPIs that were crucial for driving growth. By standardizing and prioritizing these KPIs, we created executive-level dashboards providing clear, actionable insights. 2️⃣ Aligned Leadership: It was essential to get everyone on the same page. We worked closely with leadership and teams across the business to align on the most impactful initiatives. This included developing a robust value creation target focused on improving revenue and expense profile, ensuring that everyone was speaking from the same set of facts and was clear on direction. 3️⃣ Optimized Revenue Operations Leveraging existing technology, we developed a detailed plan to enhance revenue operations. This included improving customer analytics to reduce churn and boost net dollar retention, driving profitability at both the customer and product level. 4️⃣ Implemented a Sustainable Process: Beyond the immediate fixes, we established a long-term process for reviewing insights from the dashboards and acting on them. This systematic approach allowed the company to continuously optimize performance and make informed decisions swiftly. The Result? The company not only enhanced its enterprise value but also gained a sustainable process for improving decision-making and response time. The transformation led to significant revenue enhancement and cost savings, positioning the company for long-term success. It's not just about having the right tools—it's about using them effectively to drive real, measurable results. This case study is a testament to the power of aligning strategy with execution, leveraging data-driven insights, and focusing relentlessly on value creation.

5 guiding principles for effective value creation planning. Don't leave home without 'em ⤵️ — 1. Start with a clear and unifying vision: >> Developing a value creation plan without a clear vision in mind is like setting sail without a clear destination in mind. Don’t proceed to value creation planning until your leadership team is clear/aligned on (1) the long-term vision for the business, and (2) long-term financial targets. — 2. Everything ties back to the “value drivers.” >> There are 5 basic ways to create equity value in a business (grow revenue, expand margins, do M&A, pay down debt, expand multiple). Start by asking yourself: which combination of these drivers will be most important to a successful outcome? The value creation plan then spells-out what specifically you’ll do to actualize each of these value drivers. — 3. Get focused on the vital few. >> Making a little progress on a bunch of different value creation initiatives is far less impactful than totally nailing the small number of “winning moves” that matter most. So be disciplined about prioritizing. One of the biggest mistakes companies make in value creation planning is trying to take on too much. — 4. Document your plan. >> If it isn't written down, it doesn't exist. Like any planning endeavor in a business, your value creation plan should be documented centrally, and follow basic planning best practice: eg. each initiative has a clear owner. eg. clear owner. Track performance & learnings vs. the value creation plan rigorously. Course correct where needed. — 5. Don't forget the people. >> Too often, companies get so caught up in the mechanics of value creation planning that they lose sight of a critical point: a value creation plan is worthless if you don't have the right fit-for-purpose people aligned against your value creation agenda. As your value creation plan is taking shape, get in the habit of asking yourself: "Do we have the right person aboard to deliver on [insert initiative]?" What else? #ValueCreation #PrivateEquity

As a new leader in an organization, it can be daunting to know what moves you need to make in order to create value and innovate within your teams. For leaders in private equity owned portfolio companies (like myself), you have an additional layer of resources, stakeholders and performance metrics that you need to consider which adds both opportunity and complexity. Fortunately, Dan Cremons, a PE industry veteran and author, surveyed dozens of successful mid-market pros and investors to highlight their collective wisdom and strategies into a tactical playbook for consistent, predictable success. The thesis for the book is simple: "Long term value is created for investors only when portfolio companies create value for customers, suppliers, partners, and employees." Simply put, if you want to capture value - you need to create value for your stakeholders. And it doesn't happen by accident. Preparing for my new role at SignUp Software, I got a copy of his excellent book "Winning Moves: 105 Proven Ways to Create Value In Private Equity-Backed Companies" thanks to the recommendation of the great and powerful, Russell Cude. He did not steer me wrong (or he would have faced my wrath 😉). Cremons details organizing a "Value Creation Playbook" for your company to assess, measure and drive value in specific areas: Grow Your Revenue Keep Current Customers Sell More to Current Customers Find New Customers for your Current Market Find New Customers in New Markets Sell New Products to New and Existing Customers Capture the Value Created for Your Customers Drive Margin Expansion Execute Strategic Acquisitions Pay Down Debt Drive Multiple Expansion In addition, he also puts a great deal of focus on talent management, change management and creating strong systems of execution - all of which are extremely valuable for consideration and planning. What resonated with me about this book, aside from the concise and thoughtful delivery, is the fact that it's not enough to just create a plan and write it down and hope for the best. Plans are for executing successfully. Scenarios change, sails need adjusting and human beings need leadership - not just management. I'd highly recommend this book for anyone in sales, leadership and especially within the mid-market PE ecosystem to help guide your efforts to do big things and maximize your impact. #RobsReads Winning Moves by Dan Cremons ⭐⭐⭐⭐⭐

Top private equity advisor shares what 'Transformation' means for portfolio companies... Excited to share insights from my podcast conversation with Kiran Kumar, who has advised leading PE firms on creating exceptional portfolio value for over 3 decades. In this eye-opening clip, Kiran challenges conventional wisdom: "Financial engineering alone is not transformation." "Cost optimization alone is not transformation." True portfolio transformation requires expanding the top line, driving innovation, and leveraging technology as the primary value-creation engine. Our full episode explores(link in comments): → Tech-driven strategies that deliver superior returns → How mid-market PE firms leverage Global Capability Centers → Due diligence frameworks that uncover hidden value → Building sustainable growth beyond financial engineering Essential viewing for PE professionals and PortCo executives looking to maximize value creation in today's tech-driven landscape. #PrivateEquity #ValueCreation #PortfolioCompanies #TechTransformation Flywheelr Anuraag

📈 Does your incentive plan drive real value creation? I break down common flaws in traditional incentive structures and cover innovative best practices that reliably drive shareholder returns in the latest episode of #CreateMoreValue. The problems: 🔹 Ineffective performance measures that don’t align with TSR 🔹 Convoluted payout structures 🔹 Sandbagging of targets which leads to planning for mediocrity 🔹 Endless negotiations that stifle the flow of information 🔹 Year-end pushes that often destroy more value than they create So, what’s the solution? A better measure✅ better target ✅ setting better payout structures ✅ Fortuna’s Residual Cash Earnings (RCE) is a modern economic profit measures: ✔️ Restore sanity to planning and target-setting by delinking the budget from incentives ✔️ Clarify your best strategy, capital allocation, and portfolio optimization opportunities ✔️ Unite the team on a shared goal of value creation, not financial engineering (trust me, investors can tell the difference) The results speak for themselves. Our research shows companies using economic profit measures like RCE outperform the market by 7% annually. 🎧 Podcast: https://lnkd.in/exGWiJaP 🎥 Full video: https://lnkd.in/euxdFeNi 📽️ Reel: https://lnkd.in/ePZ2YHUF #PerformanceMeasurement #IncentiveDesign #IncentiveCompensation #ExecutiveCompensation #Annual Incentive #Compensation #CorporateGovernance #EconomicProfit #TotalShareholderReturn #ValueCreation #CapitalMarkets #SharePrice #CorporateCulture #BehavioralFinance #BehavioralEconomics #CorporateStrategy #FinancialStrategy #FortunaAdvisors #Podcast #CreatMoreValue #CuringCorporateShortTermism