Blog · Go-to-Market

The Essential Role of GTM Frameworks for Private Equity

Written by Natasha Bunten
January 4, 2024

The COVID Hangover

Coming down from a couple years of an overheated market that drove up valuations combined with inflation which overstated revenue growth performance, private equity can’t bank on standard strategies to achieve the thesis at exit. Simply said, traditional cost take-out and price optimization aren’t enough to drive valuation growth. PE companies are now implementing value creation teams to ensure organic growth can make up the difference.

I worked with several PE firms during the heyday to support their due diligence efforts. I consistently found that when all boats are rising, even the most experienced professionals overlook processes in the interest of speed. Now, PE firms are coming back to the processes to scale their value creation teams and fund managers. Here, I’ve highlighted key impact areas from interviewing a premiere PE firm who focuses on lower middle market deals and has successfully executed a strong go to market (GTM) framework.

“Frameworks are key… they allow us to balance the need for speed with the need for quality. Without them, you’re just shooting in the dark, especially with things like add-on integrations and new product rollouts.”

“Essential” Role of the right GTM Framework

Frameworks are crucial to ensure execution speed, quality and efficiency. All the makings of scalability can be found in the right GTM Framework. Especially when it comes to scenarios like add-on integrations, new product introductions and go-to-market rollouts, PE needs a framework to get to value, and quickly.

“I view frameworks as an essential methodology and or practice to achieve the right balance of portfolio transformation. Specifically, the execution speed.”

Speed Is Necessary, But Quality is a Must-Have

Every portfolio company will go through multiple go-to-market strategy refreshes, which are integral for maintaining the company’s competitiveness and relevance. The old adage of “what got us here, won’t get us there” applies to portcos as well. Having a repeatable framework allows the management team to rinse and repeat best practices. Their ability to stay agile and responsive to market conditions is what can make or break a company from realizing their exit valuation.

“It reduces errors, rework and issues by 30-40%.”
A good framework will set the company on the right growth trajectory on the outset. But excellence is revisiting key elements and layering in more complex go-to-market initiatives as the management team matures in their own expertise.
“The right GTM Framework will deliver quick wins, but ideally the company will continue to improve their sales and marketing function by measuring where they are at and charting their next step towards even better results using the framework as a guide.” -Craig Woll, CEO Centrae

Articulating the Progress With Consistency

The Centrae Framework boosts a fund manager’s credibility by allowing snapshot data that articulates progress between companies. It enables the value creation team, operating partner or fund manager to assess the comparative progress of each portfolio company and its growth opportunities.

“(It’s) a mechanism to allow our stakeholders, our investors to see consistent information. So when we say the pipeline is so big, it’s measured a certain way. Certain length of times, certain time parameters. So all the way from investors, the fund manager, the senior operating partner of the portfolio companies, it’s very important that there’s a consistent methodology to measure those critical KPIs and it gives you a way to compare and set up benchmarks or best practices. So if you’ve got a consistent way to measure, consistent reporting, and you now have a way to gauge one portfolio company against another versus if you measure a differently, you’re always comparing apples to oranges.”

Conclusion

In the fast-paced world of Private Equity, time is money. As portfolio companies are constantly repositioned to maximize value, having a structured sales and marketing framework becomes invaluable. Not only do they enhance the speed and quality of strategy refreshes, but they also set the stage for consistent, long-term success.

“I’ve worked for multiple private equity firms, some use limited frameworks to no frameworks. Others used considerable frameworks. And what I found is the exit process goes 20 to 30 percent faster and overall valuations are higher.”
It’s clear: for PE firms aiming to get their portfolio companies up to speed swiftly, a solid framework isn’t just an asset—it’s a necessity.

The Centrae GTM Framework, was developed specifically to enable PE firms to understand what will get each portco to the next level, track progress against the plan and integrate KPIs from disparate systems so they can easily get a snapshot of where their portfolio companies are at.

Schedule your free consultation to explore the Centrae Experience for GTM today.

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