LLR's Justin Reger presented at the 2013 Southeast Venture Conference, held March 13 - 14 in Charlotte, NC. Justin presented on how to get the most out of partnering with an investor. Beyond securing capital to help grow a business, partnering with an investor can bring with it the strategic guidance, corporate development support, access to talent networks and other resources needed to help business owners achieve their goals. Learn how to get the most long-term value out of a partnership with your investor.

1. Investor Value Creation
Southeast Venture Conference
Charlotte, NC
March 13, 2013

2. LLR Snapshot
LLR is a leading private equity firm focused on investing and partnering with strong management
teams to accelerate growth and profitability in established technology and service businesses.
Investment Criteria
Revenues $15MM to $250MM
Growth 10%+
EBITDA $0 to $50MM
Investment Size $20MM to $100MM
Management Vision & alignment
Market $500MM+ & growth
Differentiated, scalable, &
Model
sustainable
Situations where we can
LLR Experience
add value
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3. The Value Added Investor
A. “We love to roll up our sleeves and work side-by-side with our
portfolio companies for the long haul.”
B. “We work with management teams to implement strategic and
operating initiatives to build long-term value.”
C. “We are active investors who take a proactive approach to
working with our portfolio companies.”
D. “We work as a team to support the management of our portfolio
companies in a variety of ways.”
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4. PE and VC Backed Company Study
Revenue CAGR – Five Years After Investment
• 6,815 companies that
received PE investments
generated annual revenue
growth of 11.6% after 5
years
• 1,854 companies that
received VC investments
generated annual revenue
growth of 36.4% after 5
years
Source: Institute for Exceptional Growth Companies (IEGC) and Pepperdine University
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5. Investor Resources
Sector
Experience
Best
Lenders
Practices
Service
Providers Company Portfolio
Operating
Consultants
Partners
Advisory
Board
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6. Value Accelerators
Exit
Acquisitions
Talent Management
Value
Operational Improvements
Customers & Partners
Strategic Planning
Board of Directors
Time
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7. “We Help Build a World Class Board”
Don’t • Stacking the board with a bunch of investor types
Settle • Just a foundational board providing basic oversight and compliance
For
Get • Independent directors with direct operating experience in
Excited complementary functional areas
By • Active involvement beyond quarterly meetings
• What is the role of the Board?
Ask
• How active is the Board?
Questions
• What profile do you envision for board members?
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8. “We Provide Strategic Insight”
Don’t • A sounding board
Settle • A mandate rather than a dialogue: “Here is your three-year strategic
For plan, now go execute”
Get • Collaborative strategic planning sessions that you and your team
Excited own, with an independent facilitator
By • Playbooks and frameworks to help as a guide, but application that is
left to you and your team
• What typically happens post-closing?
Ask • Can you share a prior 100-day plan?
Questions • What are your preliminary thoughts on avenues for growth?
• What are the backgrounds of the investors/advisors?
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9. “We Can Make Introductions to Customers & Partners”
Don’t
• A network of companies that can provide meaningful business value
Settle
For
Get • Portfolio of prospective customers and/or partners
Excited • Thoughtful partner development plan
By • Deep relationships with channel partners / potential buyers
• Are other portfolio companies potential customers and/or partners?
Ask • What does the broader portfolio partner ecosystem look like?
Questions
• What is the firm’s history with driving business through its network?
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10. “We Assist with Improving Operational Efficiency”
Don’t • Monthly/quarterly reporting calls
Settle • More mandates: “You must implement these processes and
For systems”
Get • Roadmaps by each functional area from prior successes
Excited • Best practices sharing among portfolio – informal and formal
By • Specific project examples from other portfolio companies
Ask • We are challenged by X; what has been your experience?
Questions • How much interaction occurs within the portfolio?
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11. “We Can Source Talent”
Don’t • Minimal incremental value: “Meet Bob, he runs a search firm”
Settle • Unilateral hiring decisions: “Meet Joe, your new head of sales”
For
Get • Deep bench of operating talent in multiple functional areas
Excited • Relationships and experience with multiple search firms across
By multiple functions, geographies, experience levels
• Dedicated director of talent leveraged by the portfolio
• Is there someone on your staff dedicated to helping the portfolio
Ask build talent management plans?
Questions • I have holes in my management team; do you have access to talent
who can fill them?
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12. “We Can Help with Acquisitions”
Don’t • Pledge to provide or help secure incremental capital
Settle • Basic deal experience
For
• Thoughtful, collaborative approach: “Here’s an initial acquisition
Get
target list, let’s talk about what makes sense for your growth plan”
Excited
• An outsourced M&A department
By
• Previous buy-and-build experience and proven playbooks
• What are your thoughts on an acquisition strategy?
Ask • Do you have dedicated resources to support our acquisition strategy?
Questions • How much experience do you have with buy-and-builds and
integrations?
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13. “We Optimize Exit Value”
Don’t
• We have successfully exited X number of companies
Settle
For
Get • Thoughtful view on logical buyers and existing relationships into them
Excited • Flexible strategy that will expand and evolve your exit options
By • Management input on exit timing (partnership approach)
• Who have you sold prior portfolio companies to?
Ask • Do you have regular dialogues with strategic buyers?
Questions • What is your investment horizon?
• Walk me through sub-optimal outcomes
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14. Investor Evaluation Checklist
 Decide if you truly want an active investor as your partner
 Determine if they really know your space
 Make a list of areas you need help and have them present a
plan to you
 Talk to past and present portfolio companies – the good, the
bad and the ugly
 Make sure diligence is a two-way street
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15. Questions
Justin Reger, LLR Partners
jreger@llrpartners.com
215-717-2900
www.llrpartners.com
Twitter: @LLRPartners
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