PE Deal Process – One Team Approach: Investment Teams & Operating Partners

“One Team” Strategy in PE:

How the Investment Team & Operating Partners Work Together as a “Deal Team” by Stage of the PE Deal Process

 

 

1. PE Firm Receives Teaser (then CIM)

Investment Team

  • Initial screen for investment alignment (sector, growth, profitability, valuation)
  • Preliminary internal discussion on deal fit and thesis
  • Decide on the “go / no-go” decision
  • Negotiate and execute NDAs for data room access and CIM

Operating Partner

  • Early take on market opportunity (attractiveness, growth potential, competitive landscape)
  • Quick identification of operational advantages or concerns
  • Review CIMs in detail and summarize the key findings for the Investment Team
  • Help the Investment Team decide on the “go / no-go” decision

2. Pre-IOI 

Investment Team

  • Indicative Financing – Debt
    • Conduct preliminary financing analysis (leverage, debt structure)
    • Initial lender engagement, draft indicative financing terms
  • Mini-Model
    • Build a simple mini-model (initial valuation, high-level financial model & summary ROI assessment) / establish preliminary IRR/MOIC ranges

Operating Partner

  • Help the Investment Team – quickly validate core business assumptions (market size, growth rates, margins, churn)
  • Initial identification of operational diligence priorities
    • Highlight targeted diligence questions for next round (GTM, pricing, competition, market)
    • Identify immediate GTM & operational opportunities or risks
    • Surface early competitive positioning insights and differentiation opportunities
    • Assess preliminary benchmarks (sales productivity, pricing, CAC/LTV metrics, churn)

 

3. IOI – Submit IOI (1st Round Bids)

Investment Team

  • Submit non-binding IOI

 

4. Post-IOI (Pre-MP and Pre-2nd Round Bids)

Investment Team

  • Refine financial model with deeper diligence
    • Expand financial modeling, valuation analysis
  • Schedule initial expert and customer diligence calls
  • Conduct extensive customer, market, and competitive analysis
  • Develop detailed diligence roadmap for second round
    • Refine diligence priorities
      • based on first-round learnings
      • based on banker/seller feedback
  • Fireside Chat (in narrow vs broad process)
  • IC Intro

Operating Partner

  • Develop detailed commercial & operational diligence insights and deep-dives
  • Provide in-depth insights to strengthen second-round diligence:
    • Deeper GTM and sales effectiveness assessment (pipeline metrics, productivity)
    • Thorough pricing strategy benchmarks and optimization opportunities
    • Detailed customer retention and cohort analysis (NRR, GRR, churn insights)
    • In-depth competitive landscape analysis and positioning insights
  • Join the Fireside chat and listen in
  • IC Intro
    • Help by summarizing GTM & operational diligence plan for IC Intro deck preparation

5. Diligence Stage (2nd Round)

5a) Management Presentation

Investment Team

  • Attend presentations to evaluate management quality, strategy, and vision
  • Follow-up with specific diligence areas/questions

Operating Partner

  • Help prepare GTM & operational questions for the MP

5b) Debt – Commitment to Proceed

Investment Team

  • Internal approval for deeper diligence spend/investment (resources, advisors)

6. LOI – 2nd Round Bids Submission

Investment Team

  • Conduct extensive customer calls, expert calls and market diligence calls
  • Underwriting Model
    • Refine the detailed financial modeling and valuation assumptions
  • Submit refined/detailed 2nd-round bid (valuation, terms, financing structure)

Operating Partner

  • Underwriting Model
    • Help with Base Case, Downside and Upside Case scenarios related to GTM, bookings growth, churn and other areas that can affect the operating assumptions and ultimately Revenue and EBITDA for valuation
  • Provide final commercial diligence insights
  • Join calls and support with extensive commercial deep dives
  • Summarize diligence insights into actionable strategies for the future Value Creation Plan (VCPs) and for the upcoming IC materials

7. LOI Signing / Exclusivity Begins

Investment Team

  • Intensive diligence and negotiation of definitive terms
  • Ensure deal momentum continues, maintain exclusivity leverage

Operating Partner

  • Help expedite critical commercial & operational diligence areas
  • Prioritize and execute critical operational assessments (sales optimization, pricing deep dive, product roadmap validation, organizational scalability)

 

8. Confirmatory Diligence (Post-LOI / Exclusivity Period) 

8a) Confirmatory Diligence

Investment Team

  • Final business and market diligence
  • Final financial, tax, QoE and legal diligence completion
  • Finalize diligence documentation

Operating Partner

  • Help lead critical operational and commercial diligence
  • Sales Pipeline & Forecasting
    • join the call with the sales team to assess pipeline integrity and forecasted sales numbers which may affect NTM valuation (ARR and EBITDA) and may also affect deal structure (earnouts, etc.)
  • Translate findings into clear, actionable VCPs and documented for the IC deck

8b) Lender Due Diligence Target End

Investment Team

  • Complete lender diligence and secure debt financing approval

Operating Partner

  • Support lender diligence by validating operational assumptions (revenue sustainability, churn mitigation, scalability)

 

 

9. Documentation Completion

Investment Team

  • Negotiate definitive documentation, finalize terms
  • Finalize SPA (Stock Purchase Agreement), equity documents, and all financing agreements
  • Final IC
    • Obtain final IC approval

Operating Partner

  • Final IC Deck
    • Contribute with any final GTM & operational diligence and actionable items clearly for the final IC deck
    • Provide confidence and conviction ratings (scale: 1-5) around immediate operational execution plans
  • Final IC meeting
    • Support the team and help answer GTM & Operational questions
  • Strong Start / 100 Day Plan
    • Develop detailed 100-day post-close execution roadmap

 

10. Closing

Investment Team

  • Execute transaction closing (financial transfers, final documentation)
  • Capital calls & Fund flows

Operating Partner

  • Finalize the VCP (aka VMP – Value Maximization Plan)
    • operational and commercial roadmap post-close
  • Post-Close Planning – support post-close management transition and immediate execution of operational plans:
    • GTM transformation
    • Pricing optimization
    • Talent development
    • Customer success initiatives

 

P.S. Operating Partner Contributions:

  • Winning deals: Provides differentiated commercial insights improving bid competitiveness
  • Efficient diligence: Prioritizes and focuses operational diligence questions
  • Improved investment decisions: Clear commercial benchmarking and actionable diligence
  • Strong Start & accelerated value creation post-close: Immediate actionable roadmap and execution plans