A reader recently asked about deal origination and making private equity interviews with CEOs of potential investees. It can be dirty work (the reader said he felt like an Encyclopedia salesman), but it really sorts the men from the boys when deals come to fruition.
First and foremost, you need to give your call an elevated status. The gatekeeper (secretary, assistant, etc) is there to filter calls, for good reason, so you need to get through the filter by showing your call isn’t a broad-reach sales call (even if it is). You need to position your call more as a private equity interview and less as a pitch.
If you start with a rant about your company and your credentials, then sure, you’ll come across as a salesman, and it won’t seem like a private equity interview. Just with any sales call, you need to think about the potential customer and what would press the right buttons.
I use scripts very loosely, that’s not what private equity interviews are about; I may jot down a few words before making a call, but mostly I’d go with the flow and keep trying new tactics. It sounds really sleazy, but it you believe in what you’re selling, then you’re just customising a message.
Say I call the CEOs personal assistant:
‘Hi Michelle, it’s Peter from PE Partners, may I please speak to John’
I’d keep it really conversational, just use the first name, and keep it flowing quickly so there was no stress or anticipation in my voice. Often, the reply would be, ‘Sure, just one moment.’
When the CEO hits the phone:
‘Hi John, it’s Peter from PE Partners. We’re professional investors looking to make a $5-10 million investment into a soil testing company. A business like yours may use our investment to purchase a competitor, grow organically, buy-out a shareholder, or anything that helps you retire richer.’
Make sure you’re very specific about the company, such as ‘soil testing company’. He’ll think, ‘oh, we’re a soil testing company’. If you just say ‘any company’, then it sounds like a blanket call. Also, you want to dangle the carrot with the $5-10m.
Most of my colleagues would try to elevate the status of the call by making demands. They figured if they made demands of the CEO, he’d think we were important. For example, they’d ask what the company’s EBIT is before disclosing we’d invest $5-10m into a company. Sometimes it works, but mostly, I found it turned CEOs away. The private equity interview approach is much better in my opinion.