How We Work
Consumer Growth Partners was formed in 2005 by three partners with decades of experience adding value to specialty retail and branded consumer companies. Our experience came as private equity investors, public company research analysts and as operators. Over the years we have had the opportunity to work with many of the best companies in our sector and as a result our network includes hundreds of the best executives, intermediaries, service providers and investors in our sector. We formed CGP because we heard repeating questions from management teams, intermediaries and investors that we were perfectly suited to address:
Management Teams: “We’re considering bringing in an outside investor or selling our company over the next few years, but we don’t know how to prepare properly for this. We believe we could increase the value of our company prior to a transaction by implementing best practices to optimize our performance, but we don’t really have a network for this and we hate to rely on consultants. We also don’t know who are the best intermediaries or the best investors for us, and frankly nobody is really interested in talking to us until we’re ready for a transaction. Who can help me prepare now so that I optimize value later?”
Intermediaries: “We have two problems in our deal flow that we can’t seem to solve. The first happens when we are interviewing a company to engage us to raise equity or sell the company, and the company is perfect in many ways but not quite transaction ready. If we pass on the engagement, we feel like we may miss a very good transaction. If we accept the engagement, then we may have the second problem. We take the company to market and can’t get a transaction done because the problem we identified in the beginning stops investors/buyers from participating in the process. Is there a firm that works with companies like this that could solve the initial problem(s) and then bring the company back to us when the company is transaction ready?”
Investors: “We have a mandate to invest in the consumer sector, but we are sometimes leery to invest there. None of our partners has spent his/her career in this sector and we sometimes feel we lack the context to sort a great investment from a modest one in this sector. Furthermore, if we make the investment we are worried that we may not have the network necessary to add talent and/or value post investment. Is there a firm that focuses exclusively on this category as a private equity sponsor?”
Consumer Growth Partners was formed to answer these questions. We work closely with specialty retail and branded consumer businesses to add real value to the business.
Our engagements can be as short as a few months or as long as a few years. To ensure that our incentives are aligned with those of investors, owners and management teams, our compensation is typically based on a combination of an advisory fee and equity options with the majority of our compensation tied to the increase in value we help to create while associated with the company. To learn how we specifically work with private equity firms/institutional investors, owners/management teams and intermediaries, see the links below:
Private Equity Firms/Institutional
Owners/Management Teams
Often owners/management teams have opportunities to increase the value of their business, but may be reluctant to pursue them. This is primarily driven by a lack of access to appropriate human and/or capital resources and a lack of knowledge how to navigate through the sea of available resources. CGP can assist owners/management teams by working with them to achieve best practices and an optimal liquidity event over a targeted time frame. Our approach begins with an assessment of the current operations of the company and is followed by working with owners/management teams to identify the improvements most likely to increase the value of the business to prospective buyers/investors. With this roadmap, owners/management teams can focus on value creation knowing they have a plan and a partner that will help them consummate a liquidity event in a way and at a time that maximizes value.
Intermediaries
The majority of our engagements come through intermediaries who represent owners/management teams. Consumer Growth Partners welcomes the opportunity to work on an assignment for a traditional buyout or growth transaction in our sector. In addition, CGP can be helpful in assisting the intermediary (or company) in preparation for a formal transaction even though the timing may be premature given the company’s size, inconsistent performance, infrastructure limitations, current valuation, etc. In partnership with the intermediary, CGP can work with a company to make it transaction-ready and then return to the intermediary when a transaction can be efficiently completed.
Private Equity Firms/Institutional Investors
We work with private equity firms and institutional investors to help them complete new investments and/or to optimize the value of current portfolio companies. For new investments, private equity firms/institutional investors may lack the in-depth domain expertise to confidently pursue opportunities in the specialty retail, consumer products and restaurant sectors despite a history, interest or willingness to invest. When investors evaluate opportunities in one of our sectors, CGP can be engaged to provide in-depth domain expertise and transaction support. We utilize our own expertise as well as that of our extensive resource network to assist our partner throughout the life of the investment.
We also work with investors on their current portfolio companies that may not be meeting partner expectations. We have the experience and expertise to analyze why performance is falling short and to recommend how to improve performance. Often management resources must be added for the company to achieve performance targets. We have an excellent network available to help assess and identify management talent. We also have relationships with strategic investors who may be either potential customers or acquirers of the company.