Dear group private equity members!
Steve Jobs was one of the most successful entrepreneurs in the last 100 years. In his famous “Standford speech”, he tells 3 very personal lessons from his life, that made a huge impact on him.
He did not talk about money, EBITDA, market capitalisation or company valuation. At the core of his lessons was the message, to follow the way of the heart. (See: 4:48 to 5:34 https://www.youtube.com/watch?v=UF8uR6Z6KLc)
Now does that apply to the management of an SME? Well greatly so!
I have seen it a few times in my assignments as Interim executive for SMEs. If there was a passionate CEO or an entrepreneur the company was performing much better on average then without such a leadership.
To put in a nutshell: EBITDA growth is direct derivative of soft factors like the CEO´s passion.
I mention this, because looking for that passion is not part of a formal due diligence process in a private equity purchase process.
What is your opinion?
Should it be included or is that something that to be avoided, because it is irrelevant or because it is difficult to quantify?
Looking forward to your views on it …