Mays. Mantle. DiMaggio. Clemente. Griffey. Trout. All triple threats.
Great hitters, plenty of steals, sterling defense. The total package. Basically, the players you always want on your team.
If you’re growing a business, you want the same kind of versatility—and the same production. You want a partner with experience in operations, investors and M&A. A triple threat for maximizing value.
Let’s break down what a triple threat in business looks like.
Operator - Hitters
If a company looks at increasing value through an investor lens, the focus is on hitting specific revenue growth or EBITDA metrics. From an M&A perspective, the focus is on similar math-driven targets.
But an experienced operator has a deeper understanding of the value drivers.
When operators are involved, you historically see an outsized return. So why doesn’t everyone use them? Because most funds can't afford to hire a team with the required depth of experience. To have operators across your key business units means a very expensive bench.
For an operator, value is about more than numbers, it’s about strategy and tactics to achieve those numbers. It’s about deeply understanding and defining the market, products, processes, and talent. And that’s invaluable.
Investor - Runners
If a CEO buys into the fact that operators can drive value, they can look to a professional services firm. However, these firms are all about cash upfront, typically looking for 3X their costs. They execute projects, charge fees, have no responsibility for outcomes and they get paid no matter what happens. Even when they don’t get on base.
A better model might be to have a partner with an investor mindset. One that invests its most precious resource—its time—and delivers investor-like returns in a shared risk, shared upside model.
If this investor mindset is paired with operator experience, they are in a position to know they can drive value and get to the next base no matter what.
M&A - Fielders
When a company is operationally sound and growing in value, it needs to get noticed. From an M&A perspective, it’s critical to have a partner who understands the ecosystem, and gets the company on the radar of potential acquirers.
“Value is not about chasing multiples. It’s about creating ‘transferable value,’” notes Jim Barnish, Orchid Black co-founding Managing Partner. “You build the business in a manner that attracts and compels the right and best buyers and is stress-tested against due diligence and buyer criteria. That puts you in a place where investors and acquirers are calling you. You’re not selling, you’re being bought.”
You also want an M&A partner who has a thorough knowledge of transactions. Safe to say, structuring a deal is not recommended to anyone who hasn’t done it before. You want a team who has been through multiple transactions and understands all of the moving parts.
So, how do you grow a business?
So how do you grow a business? You can try and do it organically, you can raise money with investors who promise to help you grow, or you can hire pricey consultants. At Orchid Black, there’s a fundamentally different approach to growth. We are not just M&A advisors or investors; at the core we are operators.
Our team of former CEOs, CROs, CMOs, strategy execs, chairmen and board members are a seasoned, serious team. In fact, we put our money where our mouth is—our compensation is aligned to your success. The more value we create, the better we both do. So when we engage, we are uniquely invested, betting on our own skills, alongside our partners.
While operators drive maximum value, many don’t truly understand the other two parts of the triangle: the investor mentality and the M&A experience. The Holy Grail is all three points-of-view, all three disciplines in one partner. A triple threat.
What does value creation look like?
For Orchid Black clients it starts with a Value Creation Assessment; a deep-dive involving significant research on the company, the market landscape and the overarching opportunity. This repeatable methodology is configurable based on company/stage and drives a level of discipline and structure to identify the best possible growth options and the level of execution/capital risk.
During this analysis, it's common to discover companies are not in alignment in functional areas of the business. With tech companies, for instance, the product is usually further developed than other parts of the business. This causes misalignment and missed goals.
Look for areas that will drive the most value. When founders analyze their business they look for things to fix in areas where their expertise lies. But those are likely not the areas that are going to get them to where they need to be. The key is to leverage rich expertise and experience to know which areas will achieve maximum value.
This starts by asking questions. A lot of questions. But if you’ve never run a sales team, you don’t know what to ask. If you’ve never run marketing attribution, you don’t know what to ask. If you’ve never built a strategic plan, you don’t know what to ask. But when you go to sell a company, the buyer will definitely know what to ask.
One of these questions will be about talent. It’s key to identify and place the right talent in the right place to maximize value.
“Talent acquisition is not as simple as it sounds,” explains John Semyan, Orchid Black Operating Partner, with 30+ years in recruiting experience, “The cost of a hiring mistake is extremely expensive, both in lost time as well as dollars.”
At Orchid Black, we never look at a client CEO and say, “Hey, the plan we gave you isn’t working,” because we guide the entire process, from strategy, to talent acquisition, all the way through execution. Orchid Black is a triple-threat partner, as M&A advisors, as investors, and as operators.
We’re talking about more than selling a company. We’re talking about investing in and driving value for the best possible outcome.
We’re talking about May’s catch. DiMaggio’s streak. And Trout’s two hundred stolen bases. We’re talking triple threat.
Steven Horwitz is an Orchid Black Co-Founding Managing Partner. He is a performance-driven strategist with over 30 years of executive leadership and venture capital consulting experience across software and technology-enabled service organizations. As a high-energy, hands-on leader with exceptional critical thinking and creative problem-solving skills, he’s got a strong record of accomplishment of building and inspiring high-performance teams to solve complex organizational challenges. Steven’s strength spans high growth environments and turnaround situations ranging from early stage, venture-backed software startups through Fortune 100 companies.
Steve can be reached at firstname.lastname@example.org.