During due diligence, the most revealing portfolio company reference checks involve asking CEOs leading questions. Frame inquiries to suggest the private equity sponsor is taking undue credit for successes. This tactic encourages frankness and uncovers the true dynamics of value creation and deal sourcing.

PE firms often overwhelm portfolio management with requests without explaining the 'why'. By clearly linking each request to equity value creation from the outset, PE firms can better align and motivate the management team, which is their most critical asset for a successful exit.

An operating partner's real value isn't telling operators what to do but sharing the cognitive and emotional burden of leadership. By helping leaders think through the consequences of tough decisions, they provide the clarity and conviction needed to act, something operators often struggle with alone.

When the CEO is the sole go-between for the PE sponsor and the executive team, communication becomes guarded and decisions get reopened. The solution is to facilitate direct, inclusive meetings between the sponsor and the entire leadership team to build trust and shared understanding from the start.

To avoid unproductive, subjective disagreements, the CEO and CRO must center their interactions on shared, objective data. This data-first approach fosters alignment and ensures conversations are focused on performance, not personal opinions.

Instead of the PE sponsor and the portfolio leadership team creating strategies in isolation, they must co-create from the beginning. This collaborative process builds alignment on the 'why' and 'what,' preventing the communication breakdown that happens when strategies are handed down.

With a PE-owned target, engage its leadership on operational partnership details while simultaneously discussing the long-term acquisition case and financial horizons with the PE owners. The Corp Dev leader must orchestrate these parallel, distinct conversations.

The most valuable role for a board member isn't giving advice, but acting as a "sparring partner." This involves asking sharp questions that help founders surface their own insights and gain clarity on ideas they already hold, especially when navigating uncharted territory.

VC Seth Levine argues investors' primary power lies in influence, not control. Beyond investing or replacing a CEO, their role is to advise, not operate. He actively clarifies in board meetings that topics are for discussion to inform the CEO's decision, not for the board to decide, preventing investors from overstepping their role.