There's a surprising disconnect between the perceived brilliance of individual investors at large, well-known private equity firms and their actual net-to-LP returns, which are often no better than the market median. This violates the assumption that top talent automatically generates outlier results.

Terminating an employee shouldn't be viewed solely as a negative outcome. Often, a lack of success is due to a mismatch in chemistry, timing, or culture. Parting ways can be a necessary catalyst that enables the individual to find a different environment where their skills allow them to thrive, benefiting both parties in the long run.

The best private equity talent often leaves large firms encumbered by non-competes, forcing them to operate as independent, deal-by-deal sponsors. LPs who engage at this stage gain access to proven investors years before they have a marketable track record.

Over a long career, great leaders accumulate a "snowball of talent"—A-players who follow them from one venture to the next. This becomes a powerful litmus test when hiring executives: if they have no network of past colleagues eager to join them, it's a major red flag about their leadership ability or the quality of their past teams.

A company’s true values aren't in its mission statement, but in its operational systems. Good intentions are meaningless without supporting structures. What an organization truly values is revealed by its compensation systems, promotion decisions, and which behaviors are publicly celebrated and honored.

Structuring compensation around a single, firm-wide P&L, rather than individual deal performance, eliminates internal competition. It forces a culture of true collaboration, as everyone's success is tied together. The system is maintained as a meritocracy by removing underperformers from the 'boat.'

Beyond financial incentives or strategic differences, a primary driver for a successful partner to spin out from an established firm can be pure ego. The desire to build something independently and prove one's own success is a powerful, albeit rarely admitted, motivation for starting a new venture.

The career arcs of venture and buyout investors differ starkly. VCs rely on networks relevant to young founders, leading some to retire by 45 as connections become stale. In contrast, buyout investing is an apprenticeship business where age and experience are increasingly valued.

Firing someone feels adversarial until you reframe it as a win-win. The employee wants to be successful and valued; if your team isn't the right place for that, helping them move on is a service to their career, not a disservice. This mindset changes the entire dynamic.