By Mario Peshev, DevriX
Most digital value creation engagements in private equity fail quietly. Not with a blowup, but with a quarterly readout full of traffic charts and shipped features that never shows up in the P&L. By the time the operating partner asks the plain question, “what did this move in EBITDA,” the answer is a shrug wrapped in a dashboard. The vendor got paid. The thesis did not move. And the deal team learned, again, that a busy agency is not the same thing as a value creation partner.
I have sat on both sides of this. I run DevriX, which operates as an embedded digital partner inside portfolio companies, and I have watched sponsors sign the wrong kind of firm for the wrong reason at the wrong stage of the hold. This piece is about the decision itself: what a deal partner or operating partner is actually deciding when they choose a digital value creation partner, and how to judge the candidates in front of you before the money starts moving.
What you are really buying, and it is not a website
Start with the honest framing. A PE-backed buyer is not purchasing websites, campaigns, engineering hours, or an AI roadmap. Those are line items on an invoice. What you are buying is measurable enterprise-value improvement, tied to one of a short list of outcomes: revenue growth, EBITDA expansion, cash-flow improvement, faster integration, reduced operating risk, better management visibility, a higher exit multiple, or a shorter path to exit.
Every candidate partner should be able to name which of those they are moving and how they will show it. If a firm cannot connect its work to a number on your model, you are not buying value creation. You are buying activity, and activity dressed up as outcome is the single most common failure mode I see in vendor relationships.
This distinction is not academic. Bain’s annual Global Private Equity Report has documented for years that returns have shifted away from multiple expansion and financial engineering toward operational improvement. When the hold period does the work, the digital function stops being a cost center and becomes part of the value creation plan, or it becomes dead weight. There is not much middle ground anymore.
I have written before on why PE value creation requires embedded partners, not advisory firms, and the core of this decision follows the same logic. Advice you can shelve. An embedded operator you cannot, because they are inside the P&L with you.
Match the partner to the stakeholder, not to the org chart
The mistake I see most often is treating “the fund” as the buyer. There is no single buyer. There are stakeholders, and each of them needs a different thing from a digital value creation partner. Get the match wrong and even a competent firm will feel misaligned for the entire engagement.
The deal partner wants thesis, risk, and exit
A deal partner does not care how many sprints it takes to rebuild a lead funnel. They care whether the digital story supports the investment thesis, whether it introduces diligence risk at exit, and whether it shortens or lengthens the path to a clean sale. When you brief a candidate partner, watch whether they instinctively translate their work into thesis language or default to describing engineering activity. The second group is not wrong, they are just talking to the wrong person.
The operating partner wants speed, adoption, and a repeatable playbook
The operating partner lives with the portfolio company day to day. They want a partner who moves fast, whose changes actually get adopted by the management team rather than admired and ignored, and whose approach can be run again across other holdings. A digital partner who builds a bespoke snowflake for one company and cannot repeat it is worth less to a portfolio than one with a system.
The CFO wants cash, forecast reliability, and no covenant surprises
The CFO judges the partner on whether the spend converts to cash, whether it makes the forecast more reliable or less, and whether any of it touches quality-of-earnings questions. If a digital initiative inflates a metric that later gets scrutinized, that is the CFO’s problem at exit. This is where a candidate’s honesty about what is realized versus forecast matters most, and I will come back to that.
Before you run a process, get the sponsor and the portfolio CEO to agree on which stakeholder owns the relationship. If they cannot, the engagement will drift.
The five questions that separate operators from vendors
When I advise sponsors on picking a digital partner, I hand them the same short diligence list. None of these questions are about capability. Every agency will claim capability. These are about accountability.
Which financial line do you own, and how will you prove you moved it?
The strongest answer names a specific line and a method of attribution. The weakest answer talks about “supporting” growth. “Support” is the word firms use when they want the upside credit without the downside accountability. I explore this exact fault line in value creation consultants versus operators, because the difference between advice and P&L accountability is the whole ballgame.
What is the baseline, and when did you measure it?
No baseline, no claim. If a partner cannot tell you the starting point for the metric they intend to move, they cannot honestly tell you they moved it. Any credible outcome claim needs four things: the account, the period, the baseline, and the method. Demand references that meet that bar. When a firm shows you a case study with a big percentage and none of those four elements, treat the percentage as marketing, not evidence.
How do you classify the impact you are claiming?
This is the question that exposes the most. Serious operators distinguish between value that is realized (already in the trailing numbers), run-rate (annualized from a proven period), forecast (modeled, not yet earned), enabled (made possible but dependent on others executing), and risk avoided (a cost or downside that did not happen). A partner who blurs forecast into realized is either careless or selling. You want the one who says, plainly, “this is enabled value, and here is what has to be true for it to become realized.”
What would you refuse to do?
An operator with a point of view will tell you what they will not build, because they have seen it fail. A vendor will say yes to everything, because every yes is revenue. The refusals tell you more than the promises.
Who is on the ground, and are they the people I met in the pitch?
The oldest agency trick is a senior pitch team and a junior delivery team. Ask who staffs the account, ask to meet them, and put continuity in the contract. Embedded value creation depends on the same people staying close enough to the business to understand it.
Advisory or embedded, and how to tell which you need
There is a real choice underneath the vendor selection, and it is not about quality. It is about model. A diagnostic-and-recommendation firm produces a deck. An embedded partner produces changes in the business and stays to own the result. Both have a place. The trap is buying one when you needed the other.
You need a diagnostic when you do not yet know where the value or the leakage is. You need an embedded partner when you already know the direction and need execution that actually lands and sticks. At DevriX we run both, a value creation diagnostic that finds and quantifies the leakage, and an embedded retainer that fixes it, precisely because sponsors routinely misdiagnose which stage they are in.
A light diagnostic in the fifteen-to-twenty-five thousand dollar range answers “is there something here worth investing in.” A full diagnostic in the forty-five-to-seventy-five thousand range answers “here is exactly what to do and what it is worth.” An embedded retainer, which for meaningful portfolio work runs from roughly fifteen thousand a month up past fifty thousand depending on scope, is what you sign when the answer to the diagnostic is yes and you want the same people to execute it. Judge a partner partly on whether they will tell you honestly which of these you actually need, rather than upselling you straight into the largest one.
Watch the diligence-stage signals, not just the marketing
By the time you are choosing a value creation partner, you often have commercial due diligence findings in hand. Use them. If the CDD surfaced red flags in the B2B commercial engine, weak pipeline, concentrated revenue, a broken handoff between marketing and sales, then the partner you pick should speak fluently to those specific findings, not to a generic growth pitch.
The same discipline that separates good CDD from bad CDD separates good partners from bad ones. McKinsey’s private capital research and BCG’s work on principal investors both keep landing on the same point: the funds that outperform are the ones that convert diligence insight into operational execution during the hold, rather than treating diligence as a document that dies at close. Your digital partner is one of the mechanisms for that conversion, or it is not.
Ask a candidate to react to your actual diligence findings in the room. A firm that can tell you which of the flagged problems it can move, which it cannot, and which are not digital problems at all, is worth more than one that promises to solve everything. Related to this, be careful how the partner’s work interacts with your earnings quality. Some digital “wins” quietly borrow from the future or lean on adjustments that will not survive scrutiny. I covered the mechanics of this in adjusted EBITDA and the art of add-backs, and the honest partner will flag when a proposed win is really an add-back waiting to be questioned.
Judge the first hundred days before you judge the roadmap
A long roadmap is easy to sell and easy to hide behind. What tells you whether a partner is real is what they propose for the first hundred days. In a newly acquired business, the early window sets the tone for the entire hold, which is why I keep returning to the discipline of a 100-day go-to-market plan.
A credible partner’s first-hundred-day plan will be short on grand rebuilds and long on quick, provable moves tied to revenue or cost. It will name what gets measured, what the baseline is today, and what “done” looks like in cash or pipeline terms by day ninety. If the first hundred days is mostly discovery, audits, and stakeholder interviews with no committed outcome, you are paying for the firm to learn your business on your clock.
Where the go-to-market engine and the digital partner overlap
Digital value creation is rarely just a technology problem. Most of the enterprise value sits in the commercial engine, how the business finds, wins, and keeps customers. That is why the best digital partners work shoulder to shoulder with whoever owns go-to-market, and why the wrong ones stay siloed in a “build” lane and never touch the numbers that matter.
If your portfolio company has a fractional or full-time commercial leader, the digital partner should reinforce that work, not compete with it. I have written on how fractional CROs in PE fix win rate and CAC rather than revenue theory, and the same standard applies to digital: fix the specific mechanics that leak money, do not sell a theory of growth. The clearest overlap is in avoiding the common PE go-to-market value creation pitfalls, where digital spend scales a funnel that is fundamentally broken and simply loses money faster.
Build the scorecard into the contract, not the kickoff deck
The commercial KPIs that will define success should live in the agreement, not appear later as a nice-to-have. When I run portfolio company operating reviews, the engagements that work are the ones where the partner agreed up front to be measured on the same commercial KPIs the operating partner already tracks. That alignment is the whole point.
Put three things in writing. First, the specific financial line and metric the partner owns. Second, the baseline as measured on a named date, with the method attached. Third, the review cadence and the format, ideally the same operating review the portfolio company runs internally, so the digital work is judged on the board’s terms rather than the vendor’s. Governance research collected on the Harvard Law School Forum on Corporate Governance keeps making the same point about oversight: what gets measured in the operating rhythm is what actually gets managed. A partner who resists being measured on your terms is telling you something. Believe them.
The decision, stated plainly
Choosing a digital value creation partner is not a procurement exercise and it is not a capability comparison. It is a decision about accountability and about matching a model to a stage of the hold. The candidate that wins should be the one who names the financial line they will move, states the baseline honestly, classifies their claimed impact without inflating it, tells you what they will refuse to do, and agrees to be measured on the same operating review your portfolio company already runs.
Everything else, the case studies, the credentials, the roadmap, is downstream of those five things. If the fundamentals are absent, no amount of polish makes the engagement safe. If the fundamentals are present, you are buying an operator, not a vendor, and operators are what move enterprise value during a hold.
The broader shift here is not going away. As PitchBook and the Bain report both keep documenting, longer holds and tighter exit conditions are forcing operational value creation to carry more of the return. That raises the stakes on every partner decision, digital included. Future-proofing a portfolio company depends on getting these choices right, a theme I develop in 26 lessons for business leaders.
Where to take this next
If you are weighing a digital value creation partner for a specific portfolio company, the fastest way to pressure-test the decision is to run a short diagnostic before you commit to a retainer, so you know what the value actually is and whether the partner can move it. If you want to talk through the choice for a live deal or a current holding, book time through my advisory exploration, and if you want to see how the embedded model works in practice, the DevriX services page lays out how we run diagnostics and embedded retainers inside portfolios. The goal is the same either way: buy an operator who moves a number, not a vendor who fills a deck.
