Raise money, survive and thrive: Experts tips for Private Equity investment
On episode 13 of our M&A Masterclass series, we were joined by Paula Shannon, Chief Evangelist for the global experience platform Lilt.
Paula brings 30 years of experience of public company global sales and marketing leadership with domain experience and expertise across the language industry, which includes deep experience in translation, localization, internationalization, and the use of advanced technologies, including AI-driven machine translation.
In 2019, Paula was appointed as a dedicated advisor to Lilt, a San Francisco based interactive adaptive neural machine translation startup, and serves as their chief evangelist.
Paula has found herself on both sides of a deal, working both as an advisor to Private Equity firms and to company founders seeking investment.
In this time she has learned valuable lessons on how to raise money, survive and thrive in the world of Private Equity investment.
Understand the difference between Quant vs Qual
“This idea of quant versus qual is so important,” Paula says.
“As a sales leader, you should be putting teams together that mirror or match up with your customer or your prospect.
“But when you’re talking about selling to an investor, you should understand that they’re going to be overwhelmingly quant-based buyers.
“Quantification is what they really care about. And you are probably more qualification-focused, like the details matter, the context matters – it doesn’t.
“They’re quantifiers so don’t try to bond, don’t try to schmooze, don’t try to finesse all of this. Of course, be human. They’re looking at the management team to see how you’ll do, but they really care about the data.”
Don’t underestimate the impact this will have on your team’s resources
“I think it’s easy to underestimate the impact that this is going to have on your team,” Paula says. “Both emotionally because they get their hopes up, but also the amount of time per day.
“They have day jobs to do. And as Olga mentioned, don’t let your revenue tank while this is going on. Well, that happens all the time.
“They get caught up, they’re running reports. It’s very compelling to go get things for these investment teams because you feel like that’s job one. They asked for this report, I best go get it.
“But it’s not. Job one is running the company.
“So you may want to think about limiting the number of people that participate in the investor interactions.”
Challenge assumptions and own the numbers
“One of the other things I’ve learned is to make sure that you own the total addressable market discussion and the segmentation discussion at a high level rate in the beginning,” Paula says.
“Because if you do not agree with their assumptions and assertions or if they have taken external data from any number of our consultancies that service the localization industry and they put that up as fact: this is the total addressable market for localization; This is what I think the segment of x is worth – well, those numbers are flawed. They’re deeply flawed.
“And it wasn’t until our second round that I had the confidence to say, no, I actually don’t agree with that number and here’s why.
“We’re triple-counting layers and participation from freelancers to small agencies to mid-sized agencies. Here’s what I think the number is.
“But look, the number is still so large that it is a value discussion, but you’re at least controlling that because everything flows from what the opportunity is and where you’re going to put your focus and your efforts later.
“So I think that’s something that I wish I had learned earlier. But make no mistake, I will not wade into a discussion now if I don’t understand truly what the addressable market is for that opportunity.”
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