John D. McCarthy

Great analysis by the AGC team on SaaS public company comps. It's worth a look as we recalibrate mid-way through earnings season. The analysis aligns with the broader Nasdaq equity performance, where the Mag 7 (or fab 4 now :-)) have shown more resilience than the rest of the market. #AGC #SaaS #EarningsSeason #Nasdaq #EquityPerformance

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PE insights - from the latest episode of "Behind the Deal" with Orlando Bravo & Carl Thoma at Thoma Bravo. Great lessons from Orlando Bravo who discusses losing money and making many mistakes early in his career, Carl Thoma (Orlando's mentor): On People: - "PE is a people business." - "Deal-making is such a people business. It's not like you can sell the stock if you don't like it, you're stuck with your partners. " (Good point - unlike public equities investors, you are in it for the long-term, with your team, partners, and your portfolio companies - it's a people business). ------ On Making Mistakes: - “Mistakes are meant to be stepping stones to success - not stepping stones to ultimate failure.” - "People learn from their mistakes." - "Mistakes early on make great investors but you have to make sure you don't make so many mistakes that you lose confidence... and just don't make the same mistakes again". - "When you make mistakes, you have to capitalize on that." ------ On losing money (Orlando asked whether Carl was going to fire him): - "I've sunk $50 million of experience into you, so you are a star now and you've got a lot of good, expensive training." - "I'm not sure you could have been as successful without stumbling a little bit early on." - "You had pride in your work and drive that it didn't put you in a stumper and didn't leave the industry. I think 1 + 1 = 10, drive and some failures are good experience." ------ On Teamwork: - "Just like in sports, today you just cannot have individual players that are brilliant but not working as a team. We got away with that for 25-30 years of private equity, but now it's become too competitive. We've got to function as a team." ------ On communication: - "You can resolve so many issues if you just communicate." ------ Sources: https://lnkd.in/eVk_Wxwq https://lnkd.in/eem_DquZ ------ #pe #privateequity #business #leadership

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Great Article https://lnkd.in/gkSbT4Th Value Creation is Key: Validated value creation plans, combined with a meticulous and programmatic delivery approach, helps address the pressing concerns of cash-hungry LPs by demonstrating a commitment to generating cash returns and meeting current LP demands, while strengthening trust between GPs and LPs. Key Points - Net IRR was once the gold standard for measuring PE success. - LPs say DPI (Distributed to paid-in Capital) is now paramount - Distributed to paid-in capital, is the ratio of cash generated to what’s invested. - GPs are generating cash however they can. - Exits are likely to hit a five-year low this year and the average hold  time for a portfolio company has grown to almost six years (Preqin) - PE distributions at major firms have plummeted 49 percent over the last two years. - Private equity firms are motivated to distribute cash to enable LPs to commit to future funds. - GPs are responding to the demand with alternatives to exits: continuation funds, NAV loans,  subscription lines, cutting management fees.

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That planning season is upon us once more - almost like it’s an annual thing :) The more informed you are the more realistic the planning the cycle - especially in a new market transition cycle (here we go again!) Join Randy Wootton and Maxio break down all dimensions of growth and operations with data points across the SaaS market to build a plan rooted in market reality 🔥

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Chief financial officers (CFOs) are increasingly seen as prime candidates for CEO roles, reflecting a broader shift in corporate leadership dynamics. Traditionally valued for their attention to detail, risk management acumen, and focus on financial performance, CFOs are now stepping into CEO positions during times of corporate upheaval. This shift is underpinned by the evolving role of CFOs beyond finance, encompassing corporate strategy, deal-making, sustainability, and data analytics. While CFOs are increasingly seen as architects of business resilience and growth, transitioning to CEO isn't without challenges; research shows CFOs-turned-CEOs may initially struggle to drive revenue growth and must navigate interpersonal dynamics beyond their financial expertise. Nonetheless, the trend indicates a growing recognition of CFOs' potential to lead companies through uncertain times and shape future business strategies. Read More Here: https://lnkd.in/g6c-P8bw Bloomberg Beth Kowitt Branded Hospitality Ventures Hospitality Headline Newsletter #CFO #CEO #business #promotion #innovation Seth Murdoch Adam Saper David No Tom Betts Keith Melker Andrew Ockner

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A PATH FOR SMALLER IPOs From Carl Chiou (quoted verbatim), an example of a smaller IPO and what it takes. Thanks Carl! ---- I’ve been busy working on a complex transaction we announced yesterday morning. Powerfleet (AIOT), a ~$500mm market cap vertical software company announced a $200mm acquisition of a privately owned competitor concurrently with a $70mm equity issuance via a PIPE as part of a larger financing package. Why is this relevant to you? Because it demonstrates the art of the possible for smaller companies that aspire to become public companies. First, investor demand absolutely exists for smaller market cap issuers as the company raised nearly 20% of its market cap to finance a transformative acquisition. While it may feel like the path to IPO for private companies requires $500mm+ of revenue, that’s simply not the reality. But… Second, success doesn’t happen overnight as many investors had already met with the company multiple times at conferences and their familiarity with the business and management team allowed them to move quickly. For private companies, that means being active and targeted in investor outreach in the 12-18 months leading up to an IPO. Third, giving up some of the pie to grow the pie can be a win-win for everyone. The equity offering priced at $3.50 versus a prior day close of $4.66, but two days post-announcement, shares are trading comfortable above $5. As much as I’ve written about optimizing IPO pricing, I’m also realistic that for smaller cap issuers, investors are going to underwrite more conservative valuations to accept the risk of less liquid, potentially higher volatility stocks. Fourth, the consolidation thesis resonates with investors as it simplifies the competitive landscape, adds revenue scale and drives improved operational and financial efficiency that improves the bottom line. I continue to believe that as much as the large strategics and private equity will play a role in clearing out the private tech pipeline, small – midsize companies will also be key participants going forward. End of day, Databricks, Stripe and other large scale, high-fliers are going to garner instant investor attention and a high multiple out of the gate when they eventually go public. But for everyone else, it’s important to know that with the right expectations, there is a clear path to an IPO. 1:10 PM · Sep 19, 

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