"There is a powerful synergy in the combination of private equity and venture building that goes beyond pure returns on capital. It opens up new paths for innovation and sustainable growth." (Sebastian Esser, Partner)
Venture building as an indispensable strategy for the future of PEs
In a time characterized by rapid innovation and the drive for growth, private equity (PE) and venture building are in the spotlight to not only drive companies forward, but to bring them to the forefront of success. Hand in hand, at the interface of capital and innovation, a perfect interplay is created for sustainable growth, rapid return on investment (ROI) and sustainable multiples - venture building and PE: the decisive step into the future.
Inherently aligned interests
The basic thesis that PE firms and venture builders pursue fundamentally similar goals is undisputed. Both concentrate on business models that promise high internal returns and have a comparable risk profile due to their focus on SMEs. When investing in SMEs, PEs aim for a fast ROI and sustainable growth with multiples in the range of 1.5x to 3x. This harmonizes with the goals of a venture builder, which also strives for long-term success and growth and differs from the short-term focus on multiples of 10x, as is typical for venture capital, for example. Venture builders and PE firms therefore not only pursue similar goals, but also share the same DNA.
Complementary skills for fast ROI and attractive multiples
The strength of this partnership lies in its complementarity. PE firms provide the foundation - financial resources, strategic vision and a broad network to leverage synergies. Corporate venture builders, on the other hand, bring innovation, agility and increased operational excellence. Private equity firms specialize in strengthening the status quo and achieving significant efficiency gains through targeted optimization at EBIT level. At Bridgemaker, we focus on building new business models whose development has a significant effect on value creation through innovative know-how and rapid implementation. This combination makes it possible to react quickly to market changes without losing sight of the long-term vision.
Digital venture building for portfolio success
The combination of venture building and private equity creates more than just a partnership; it defines a new, sustainable strategy for growth and innovation. This synergy not only increases efficiency in value creation, but also expands the business opportunities of the portfolio companies through a progressive, digital approach. It opens up access to new customer segments, optimizes processes and taps into digitalization potential. This offers PE professionals the unique opportunity to significantly improve the performance of their portfolios and at the same time secure sustainable growth - a decisive advantage for financing SMEs.
Knowing what the future looks like even before acquisition
By actively involving Bridgemaker early on in the acquisition process, PE firms can focus on their core financial and strategic competencies. Bridgemaker offers a future-oriented view beyond the status quo during the acquisition. In this way, acquisition targets can be jointly evaluated and the potential for value enhancement defined more precisely. This is followed by the management of implementation and actual execution. Find out more about this approach in our next blog post on Future Proof Due Diligence.
