There is one skill that can turn average-performing executives into millionaires — or, when ignored, derail the careers of talented leaders. That skill is the ability to select the right deal.
PE-CXO’s recent survey revealed that the most common regret executives have is accepting a new role without understanding the true state of the company. From hidden financial details to misrepresented investment theses, poor technological processes, or non-market viable product offerings, there are a host of issues that can lurk behind what appears to be an exciting opportunity.
Accepting an offer without conducting stringent diligence puts you at risk of losing out on millions in equity, particularly if you co-invest. It can damage an otherwise stellar resume and reputation, turning a “dream” job into a nightmare.
To stop this from happening, executives can hone their deal-selection savvy by avoiding these common diligence mistakes:
Mistake #1: Believing Everything You Hear
“Before I take a job, I need to understand what the private equity sponsor’s goal is. I’m not going to take the job if I don’t agree with their goal. I need to be sure that what they want to achieve is feasible, makes sense, and is possible within the industry and organization. I can get a good idea of what their strategy is just through the interview process.”
— Brad Kerkhoff, PE-backed CRO
Don’t operate under the assumption that the default information sponsors provide is sufficient and accurate. Sponsors will not delve into c...