Private Equity: How Sales Consulting Drives Valuation Outcomes for Portfolio Companies [Case Stories Inside]

For private equity investors, companies with amazing products and inspiring founders are nothing new. Despite all of the amazing products out there, the product itself isn’t the real reason you’re investing. You need growth, and you need it quickly — which can be difficult when scaling beyond the founder. In private equity, it’s considered a best practice to increase the revenue of a portfolio company within four years or less. But, how can you scale a company in only a few years? After all, you’ve got a range of companies that need your attention — you can’t put all of your energy into one.

With sales consulting, you gain valuable insights and efforts from sales experts who specialize in accelerating top line growth, focus on sales force effectiveness and build the systems and processes needed for scale. Sales consulting provides effective solutions for a wide range of industries, increasing revenue and boosting win rates quickly — making it the perfect solution to expand your portfolio companies’ revenue growth. Read on to discover how three vastly different portfolio companies accomplished large gains over short time frames with the help of sales consulting.

1. A Transportation and Logistics Management Company Increased Revenues by an Average of 10% Each Year

After acquiring an industry-leading transportation and logistics management company, this private equity firm realized that the sales function needed an overhaul. Sales at the logistics management company were declining and underperforming delivery, leaving much room for improvement. To solve this problem, the firm hired our team of sales consultants to increase revenue by an average of 10% each year — and SFE delivered. 

The SFE team was able to assess the current sales function, evaluating current win rates, lead generation, and more, then targeted the areas with the most need for improvement. Through a detailed observation period, we began creating the plan that the private equity firm needed. We implemented a new freight processing provider and introduced a new sales CRM to better streamline sales ops for increased efficiency. In addition, we created new top-of-funnel lead generation processes to pull in better-fit leads, then recruited new talent to expand the sales force. 

In total, the company has generated over $20 million in cumulative revenue since working with sales consultants. Sales consulting helped the portfolio company offer a more robust service to a broader client base, increasing their valuation.

2. A Retail Security Company Closed More Than $1 Million of New Sales in Test Markets

When private equity firm Platinum Equity acquired a retail security company with a low sales pipeline and market share, they determined that the most profitable route would involve the expansion into new markets. As new market entry always comes with inherent risk, Platinum Equity turned to sales consulting to mitigate these challenges, such as misunderstanding the culture, pain points, and desires for new target markets. SFE Partners assessed the existing sales function and revenue forecast, then began working to prepare for new market expansion. 

To accomplish this, our sales consultants created a centralized inside sales organization, restructuring the entire sales function to create a more team-focused selling environment. Our consultants then helped the team implement enablement tools, from CRM systems to new enablement content tailored to new target markets. We evaluated the likelihood of success in new markets, helping the retail security company move into new markets and expand business quickly with minimal risk. 

Within nine months of sales consulting help, the company closed over $1 million of sales in new markets, allowing the private equity firm to sell the company with increased valuation. 

3. A Tech Start-Up Grew Their Revenue to Over $100 Million a Year in ARR

For a private equity firm, startup Cofense PhishMe™ was a promising cybersecurity investment — but it needed to be scaled beyond the founding team. Cofense PhishMe™ needed help building a sales team and creating a go-to-market strategy to prepare for a successful launch and achieve sustained growth. SFE Partners helped build sales from the ground up, creating inside sales teams, regional sales teams, and international sales partners. As the startup grew, our consultants assisted with hiring and introducing senior executives into target customers’ accounts to better understand buyer needs. 

Since its launch, sales consulting has helped Cofense PhishMe™ grow leaps and bounds, with revenue reaching over $100 million a year in ARR. In their first year alone, sales reached over $1 million, allowing the company to jump directly into substantial funding rounds. Valuation continued to grow, with the company selling to Private Equity for $400 million in 2018.

Final Thoughts

At SFE Partners, we are experts in increasing portfolio company valuation by accelerating organic sales growth. Our sales consulting strategies drive higher valuation for portfolio companies, with real, tangible results seen in sales growth. Increased revenue and business expansion means that private equity firms can feel confident that their portfolio companies’ sales are in the right hands.

Contact SFE Partners and begin driving valuation increases in your portfolio companies through consistent, scalable sales.