Brand Strength - Its Effect on PE Deal Sourcing

According to Business Insider, the average private equity firm evaluates 80 opportunities before investing in one. This means that your brand needs to stand out amongst 79 competitors to source a single private equity deal.

Think of this process as a recruiter evaluating resumes for a position at their company and your brand is a vital part of your application for that position. Sure, your underlying vision and offerings might be solid, but if your brand cannot communicate your point of differentiation in this hypothetical application process, your application will be met with the ever so dreaded, “Thank you for your application, but…”

In the same way that strong brands entice end consumers to purchase products or services, they also have the ability to attract investors who believe in the viability of the brand. So, if you are in the pool of 80 looking to be the 1, it is imperative that your brand is succinctly articulating your business’ value proposition. Private equity analysts see unique products and businesses every day. As these analysts are sorting through the stack of 80, they are often less worried about how your brand came to exist, and are simply concerned with why they should invest in your brand instead of the other 79.

Make no mistake about it, private equity dealmakers invest in your business based on the prospective financial return, not simply well-constructed messaging or well-developed brand consistency. But your brand must paint the mosaic that articulates this opportunity. What are you going to do to position your brand to source highly competitive PE deals?