PE Value Drivers: Conversations with Private Equity Professionals about how they Drive Value for their Portfolio Companies

This episode features Neal Doshi, Managing Partner at M Cubed Capital Partners. Neil is a proven entrepreneur with extensive knowledge in strategy, operations, and business development. He’s managed cross-functional teams in such areas as logistics, inventory management, sales, and strategy. And he has close to 20 years’ experience in a myriad of industries, including private equity, venture capital, information technology, automotive manufacturing, and commercial real estate.

PE Value Drivers - Neal Doshi

Some key takeaways from our conversation:

About M Cubed Capital Partners

  • M Cubed Capital Partners is lower middle market focused.
  • Don’t venture into startups or distressed turnaround venture capital.
  • Look for positive cash flow companies headquartered in North America.

Mr. Doshi and his Role

  • He spent the first two years of his career in consulting then migrated into various operational roles for over 15 years.
  • For the last five years, he worked in venture capital initially before moving into private equity.
  • He looks for founders and management teams who have grown their companies into a nice lifestyle business and partners to get them to the next level.

Strategy and Operations

  • Doshi is focused on high level strategy and planning, not getting into the weeds.
  • He helps founders and existing management teams see how to get to a 2X or 3X point.
  • His experience as an operator, both domestically and internationally in a myriad of roles, seeing different cultures, and evaluating different teams resonates well when talking to founders at ground level.
  • Having been in the weeds in their shoes, he understands what it takes to be successful. He uses that and his consulting experience to express what needs to be done to get to the next level.

Working with the Management Team

  • Post close, they don’t try to get into the day-to-day world of their jobs.
  • It doesn’t matter how much analysis has been done pre-close, an entrepreneur is going to know their business infinitely better.
  • M Cubed brings leverage and experience to help strategically to identify and close gaps from a talent or other standpoint.

Playbook and Getting on the Front End of Problems

  • Focus on a 100-day plan.
  • Every 100-day plan is different. Whether it’s a different sector, different growth profile, or different management team, there’s a plethora of variables.
  • Winston Churchill once said, “If you fail to prepare, you prepare to fail.” A 100-day plan prevents that from happening.
  • You need to have a roadmap and work together with the existing management team on what to do initially and then prepare one year, three year and five-year plans.
  • It goes back to how prepared you are in terms of expecting the unexpected and hinges on constant communication with founders and management.

Using Third Party Resources

  • Call-in industry execs at various phases on the front end of a deal to leverage their experience in a sector.
  • Understand what they are seeing in the industry, what they think about the management team, the business itself, and the strengths and opportunities for improvement.
  • Interim execs can bring additional talent to lower middle market businesses which have been bootstrapped and tend to lack experience in the executive suite.

Lessons Learned from the Pandemic

  • There’s more than one mode of thinking about how businesses are run and how to do things in private equity.
  • Think about how to pivot on the fly.
  • There’s a time and place for tools like Zoom, or Teams to gather the information to assess the deal which allows them to be more efficient and productive.
  • They’ve seen great resilience in the businesses they invest in over the last 16 months.

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