Interview – Kristy DelMuto with LLR Partners
I recently spoke to Kristy DelMuto with the private equity firm LLR Partners. With some minor edits, the text below captures our conversation surrounding LLR’s Collaborate initiative.
Tell us about LLR Partners…
LLR is a lower middle market private equity firm, based in Philadelphia. We primarily invest in growth technology or tech-enabled service businesses operating in the education, healthcare, financial technology, industrial technology, security and software industries with revenue between $10 – $100 million. We make equity investments between $15 and $100 million.
At the core, we look for growth companies with strong management teams who want to partner with us to create value over the long-term.
Tell us about your “Collaborate” program.
LLR Collaborate is the brand that we have established for our portfolio collaboration initiative. It stems out of LLR’s broader commitment to value creation.
As part of our Value Creation efforts, we have added a team of resources around human capital, technology, strategic planning, sales, marketing and finance to support our portfolio companies in those areas. LLR Collaborate is a way we can continue to add value for our portfolio companies beyond the traditional work done by investment teams and the Value Creation professionals.
Through the Collaborate program, our portfolio leaders can benefit tremendously from sharing knowledge with each other, whether that’s tactical or bigger picture strategy, and through both in-person and digital interaction. There is a fantastic experience base within a portfolio like LLR’s – about 35 companies at any given time. When CEOs and leaders in key functional areas get to this level, it’s difficult to find a peer network like this, with 35 people in similar positions that you can go to for advice. The companies in our portfolio are all at a similar stage of growth and no two companies are competing against each other. Consequently, our portfolio company leaders can have very open conversations and share best practices to help each other grow. The Collaborate program fosters this type of interaction between portfolio companies.
We started with a series of summits for our CEOs and marketing leaders years ago. Today, we have a more structured program under the LLR Collaborate brand that brings together our CEO, CFO, HR, marketing, sales and technology leaders for dedicated annual forums. During these in-person sessions, they can exchange knowledge, share best practices, learn from expert outside speakers, and build a peer network.
Further, to continue these conversations between events, we are hosting webinars, topical conference calls and geo-based smaller group gatherings. We even set up a Slack channel where Collaborate participants can ask a quick question to the network (e.g. get a recommendation about a technology, ask if anybody has feedback on a certain vendor, ask what to look for when hiring for a certain role, etc.)… so they have a digital forum for interacting too.
Tell us about “GrowthBits”.
GrowthBits are short written posts where we ask our portfolio leaders, Value Creation team members and others in our network, “What are the best practices you can share? What are the two or three things you learned while doing X?” The goal is to codify the wealth of knowledge within the LLR ecosystem and share it in a way that’s helpful to other business leaders trying to accelerate their own growth. We make these available on our website and share them through email, LinkedIn, Twitter and an annual eBook.
Our subscribers range from CEOs of companies that we may be talking to about an investment, to companies that we’ve never even heard of, to investment banks, lawyers, accountants and anybody in the broader investment community that could benefit from insights into what’s working to help grow companies at this stage.
Did you have any concerns about pushing Growth Bits out externally?
We felt this knowledge could be tremendously valuable out in the community of entrepreneurs and business owners. We would never give away trade secrets, but it’s a nice way to pass on knowledge and help our company leaders position themselves as thought leaders in their industries or their functional areas.
So far, we haven’t had a hesitation in sharing, but we are mindful that we are never going to publish something that is competitive intel.
Does GrowthBits help win over portfolio companies to choose LLR as its investor and strategic partner?
We have reasonable expectations on where this is going to come into play in that process. It’s going to be one of a wide range factors that could influence a CEO to decide which private equity firms to have a conversation with. It’s a way to give a hint of the knowledge you will have access to if you become part of our portfolio.
We also look at it as a thought leadership effort to share knowledge and show value to a broader community, even outside of companies LLR could invest in someday.
What’s been the reception from portfolio executives?
The feedback on LLR’s Collaborate programs and GrowthBits has been extremely positive. When it comes to the written content, (launched about 18 months ago), it hits on key aspects of their growth process. The posts are easily digestible and very actionable. All GrowthBits must be actionable. We want someone to read it and learn something to apply in their own business in the short-term.
The same thing for our Collaborate events, we always want an element of inspiration (because everyone needs to step away from their desk and be inspired and re-energized) but we also want to make sure that they walk away with two or three things that they can explore in their own organization. That can be anything from a new strategy to a single technology tool that solves a lingering problem.
So, the feedback has been excellent because the focus is on things that matter to them. They can read content from or have conversations with people in similar roles and get specific takeaways.
Can you share a success story?
Several years ago, there were 2 marketing leaders who met at our Marketing Collaborate event. Through the course of their conversation, they realized that they were going after the same audience (although non-competitive) and that they were tied to the same industry trends. Consequently, they could each bring a thought leader to the table to talk about a certain trend or issue in the market.
They ended up doing a webinar together. With their combined power of marketing this webinar, they brought together nearly 500 registrants. They both got the sales leads from that. This was far more successful than either one could have done on their own. By combining forces, they doubled the thought leadership and doubled the outcome for each company. All stemming from an original connection made at LLR’s Marketing Collaborate in 2016.
Other success stories?
In Spring of 2018, we combined our Sales & Marketing Collaborate efforts into one event which ended up being a great success. We had almost 50 people attend and talk about a range of topics, but Sales Development surfaced as the one of the hottest issues for people. We ended up hosting a webinar afterwards where one sales leader presented to about 35 people from other portfolio companies, outlining how they set up an SDR program and even demoed some of the technologies they use. There was no shortage of questions at the end, which spilled over into the Slack channel and continue on today both on Slack and in 1:1 conversations as people have questions about things like traits you look for when hiring an SDR, where to post jobs and how to price out your tech stack.
You rarely see people go to that extent to help each other and to swap best practices. This is a benefit of being part of a network like this and the benefit of fostering these types of dialogs between our portfolio companies.
Are other PE firms asking about this?
They are. In private equity today, many firms are looking for ways to show additional value to their portfolio companies. We are not the first to come up with this value-creation concept, but I think LLR is a leader in the sense of the full range of resources we have, between people, events and content, especially in our stage of investing.
The more digital side of Collaborate (GrowthBits) is more broadly visible. From that, other private equity firms are asking about the overall program and about our events. How do we run it logistically? What is our philosophy? How do we figure out topics? What is the frequency? Getting into the tactical details. So, people are definitely asking about it… and we are happy to share. LLR takes it a step further by recapping the events and posting it online on our website.
What’s the best way for business owners or investment bankers to reach out to LLR?
LLR is very active these days, especially following the closing of our 5th fund back in June at $1.2 billion. We are always interested in speaking directly to companies in the industries where we focus, even if we can simply help them brainstorm on their next stage of growth. Executives can email me at firstname.lastname@example.org. We also welcome conversations with investment bankers and other intermediaries about platform and add-on opportunities on their radars. Best way to reach us there is to email Michael Sala at email@example.com. And anyone can subscribe to our GrowthBits and firm updates at https://www.llrpartners.com/grow/learn/.