The era of buying at 5x and selling at 8x through financial engineering alone is over.
I sat in on a diligence call recently for a $90M target where the entire “value creation plan” was banking on multiple expansion. This playbook was the go-to strategy merely a few years ago – for a decade. But we’re in a different macro stage today. Anyone still underwriting on multiple expansion should look at where the returns are actually landing now. We pulled together the evidence behind value creation across the commercial, operational and digital levers, so the underwriting case can rest on something other than the entry multiple.
Entry multiples hit a median of 11.8x EBITDA last year. Cheap debt is gone. LPs are demanding real operational alpha, not accounting creativity. Delivering that consistently across 10 or 12 companies takes a standing function inside the fund. That function is portfolio operations, and it holds the shared standards for reporting, GTM and systems every company in the book runs against.
So what actually works now?
Building, not just buying.
The firms winning today are embedding operational expertise early, upgrading GTM infrastructure, investing in RevOps leadership, and using tech to drive measurable EBITDA impact, not waiting for market tailwinds to do the heavy lifting. Embedding early only counts if the opening quarter has a written scope. Writing an operator’s 100-day playbook sets what gets diagnosed, what gets fixed, and what gets deferred, so the operating partner and the CEO are working from the same list by week 2.
One portfolio company I advised cut marketing spend by 20% while growing MQLs by 15% through RevOps integration.
➡️ A mix of ABM and remarketing spread across inefficient channels without bid caps, with leaking funnels and irrelevant landing pages, and faulty attribution tracking – causing obvious leaks in conversion campaigns across the board.
Findings like that do not surface in a board pack. They come out of the portfolio company audit, which walks the funnel, the CRM and the spend line by line and returns a ranked list of what is leaking and what it costs.
That’s value creation. Not financial engineering.
The operating partners who thrive in this cycle are the ones who show up with domain expertise and a playbook, not just a board seat. The same playbook has to work backwards from the sale, since a buyer pays for evidence that the operating gains repeat. That is what exit readiness for private equity assembles: clean reporting, a documented GTM motion, and a management team that can defend the numbers without the sponsor in the room.
This week’s Growth Shuttle Insider breaks it all down: why the traditional arbitrage model is structurally broken, what the new PE playbook looks like in practice, and two real-world case studies showing what the “build and scale” approach actually produces.
Growth Shuttle InsiderGrowth Shuttle Insider
The Shift From Traditional PE Arbitrage to Strategic Growth is Now Complete
Mario Peshev
