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When turning down a deal, private equity professionals often tell the investment banker, "We just don't have a unique angle." This is a catch-all phrase that allows them to pass on an opportunity without providing specific, potentially contentious feedback. It's a standard, diplomatic way to exit a deal process while preserving the relationship with the banker.
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When selling to a PE firm, entrepreneurs must realize the buyer's unit of optimization is their entire portfolio, not the single acquired company. A PE firm acts as an asset manager allocating resources across investments. This means decisions about your former company will be made in the context of their broader portfolio performance.
Limited Partners (LPs) have become cynical about the overused term "proprietary deal." In response, private equity firms now use the term "direct" to describe deals sourced through their own relationships, outside of a formal auction process. This semantic shift is an attempt to sound more credible and avoid the eye-rolling that "proprietary" now elicits from investors.
An investor's best career P&L winners are not immediate yeses. They often involve an initial pass by either the investor or the company. This shows that timing and building relationships over multiple rounds can be more crucial than a single early-stage decision, as a 'missed round' isn't a 'missed company'.
The days of the successful private equity generalist are over. Limited Partners (LPs) now demand deep, specific expertise. A firm claiming to specialize in multiple, disparate sectors is seen as lacking true differentiation and focus—a strategy that may have worked a decade ago but fails in today's competitive market.
PE firms classify investment bankers and brokers into tiers not as a value judgment, but to manage their relationship cadence. Tier 1 firms, which show high deal volume, receive more frequent and intense interaction than Tier 3 firms, which might only show one relevant deal every 18 months.
Most PE firms fail to stand out, resorting to generic claims like being "hands-on" or "caring about people." With more PE firms than McDonald's in the US, a truly unique value proposition articulated clearly is critical for attracting business owners and investors.
Contrary to the common buyer preference for proprietary deals, CPC views investment bankers as a healthy part of the M&A process. They believe an banker-led process helps sellers mentally and emotionally prepare for the significant decision of selling their business, ultimately leading to a smoother, more successful transaction.
When establishing a new M&A function, the primary challenge is getting senior leaders to move beyond broad statements and make concrete strategic choices about which opportunities to actively ignore. This focus is crucial for effective execution and prevents wasted energy on opportunistic, unfocused deals.
When investors say "no," don't just accept it. Reframe their decision as a potential mistake, comparing it to common investor errors like overlooking a great founder due to market concerns. This tactic, which turned two rejections into $12M, repositions you from supplicant to a confident peer and can reopen the conversation.
By housing its private debt arm next to its private equity fund-of-funds, Neuberger ensures PE firms continue showing them deals even after a rejection. The PE firms still want Neuberger as an investor in their funds, creating a unique ability to be highly selective without damaging relationships.
