In this episode of the Private Equity Experience Podcast, we dive into the critical role of operating partners in private equity funding and their impact on the dilution of investment value. Hosts Emily Sander, Rory Liebhart, and Ed Barton break down how operating partners bridge the gap between PE firms and portfolio companies, offering tactical expertise, strategic oversight, and operational efficiencies. From CFOs and CTOs to turnaround specialists, discover why these professionals are a game-changer for PE returns and how they help mitigate risks in high-stakes investments.

Key Topics Covered:

• What are operating partners? Learn how they act as "connective tissue" between private equity funds and their portfolio companies.
• Private equity funding strategies: Explore how operating partners enhance IRR (internal rate of return) and create value through operational expertise.
• Dilution in PE investments: Understand how their role can reduce dilution risks by streamlining deal execution and improving scalability.
• Case studies: Real-world examples of operating partners in action—CFOs, CTOs, and turnaround specialists.
• Future trends: How tech-savvy operating partners (e.g., CTOs, AI experts) are reshaping PE strategies in a rapidly evolving market.

Why This Episode Matters:

• For investors: Insight into how operating partners boost private equity funding efficiency and reduce dilution of returns.
• For entrepreneurs: Learn how PE-backed companies leverage operating partners for scaling, cost-cutting, and strategic growth.
• For professionals: Discover how to transition into a private equity operating partner role and the skills needed to succeed.

Notable Takeaways:

• 70% of PE firms under $1B use operating partners to fill operational gaps.
• Operating partners bring playbooks for turning around distressed businesses or scaling growth-stage companies.
• Their expertise in private equity funding strategies, like technology integration and financial restructuring, contributes to a 3–5% IRR lift.
• The future of PE: More technology-focused operating partners (CTOs, AI specialists) to capitalize on innovation-driven value creation.

#PrivateEquityFunding #OperatingPartners #DilutionInPE #IRRStrategy #CFORole #PrivateEquityTrends #ManagementConsulting #PEIndustryInsights

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🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

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Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

Description:
Tune in to the Private Equity Experience Podcast as we dive into the increasingly controversial topic of private equity making its way into 401(k) retirement accounts. This episode explores the latest developments, including Senator Warren's strong concerns and the potential risks associated with adding illiquid and volatile assets to employee retirement savings.

Key Takeaways:
Senator Warren's Stance: We discuss Senator Warren's critical letter to Empower, highlighting concerns about transparency, high fees, and liquidity risks associated with private equity offerings in managed 401(k) accounts.

The Allure & Risks of Private Equity: Experts Ed Barton and Rory Liehert break down the potential benefits for sponsors seeking to diversify, but also emphasize the significant downsides of private equity – including long lock-up periods, market volatility, and the lack of readily available liquidity.

Dilution in Retirement Savings: We examine how the introduction of private equity could impact the overall diversification and potentially the returns of 401(k) portfolios, especially for average investors.

The Evolution of Private Equity in Retirement: This episode traces the roots of this trend back to Donald Trump's early advocacy and analyzes the current push by organizations like Empower.

Risk Assessment: Private Equity vs. AI Portfolio Management: A lively debate ensues on whether allocating private equity to 401(k)s poses a greater risk than relying on AI-driven portfolio management.

Is This the Right Asset Class? We delve into the fundamental question of whether private equity aligns with the goals and risk tolerance of the average 401(k) participant.

#privateequity #401k #retirementplanning #investments #funding #dilution #fees #liquidity #risks #illiquidassets #senatorwarren #empower #privateequityin401k #financialplanning #assetallocation #marketvolatility

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🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

Overview:

In this episode of The Private Equity Experience, Emily, Rory, and Ed dive into the world of rollup mergers in private equity. Rollup mergers involve acquiring and consolidating multiple smaller companies in the same industry to create a larger, more efficient entity. The hosts discuss the intricacies, challenges, and potential pitfalls of this strategy, providing insights into how private equity firms can navigate these complex transactions successfully.

Key Discussions:
Understanding Rollup Strategies:
A rollup strategy involves acquiring and integrating multiple businesses in the same industry to achieve economies of scale and cost reductions.
Example: Consolidating independent accounting firms into a larger firm to leverage shared resources and economies of scale.

Benefits of Rollup Mergers:
Economies of Scale: Consolidating businesses can lead to significant cost savings
through shared resources, operations, and infrastructure.
Increased Valuation: A larger, integrated entity often commands a higher valuation multiple.
Operational Efficiency: Standardizing processes and leveraging technology can lead to operational improvements and cost synergies.

Challenges & Risks:
Integration Complexity: Merging multiple businesses with different cultures, processes, and systems can be challenging.
Regulatory & Antitrust Concerns: Regulatory scrutiny may increase as the consolidated entity gains market share.
Financial Risks: Leveraging debt to finance multiple acquisitions can increase financial risk, especially if acquisition targets underperform.
Customer Alienation: The loss of personalization and unique value propositions can drive customers away.

Execution Matters:
Hiring Experienced Executives: Bringing in experienced managers who understand the complexities of business integration is crucial.
Transparent Communication: Being transparent about rollup strategy with potential acquisition targets and investors can mitigate future issues.
Risk Management: This strategy requires careful planning and continuous monitoring to mitigate both financial and integration risks.

Listener’s Questions:
Q: Can a founder implement a mini rollup strategy to make their company more attractive to private equity groups?

A: Yes, positi

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🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory