How to transition from service to product under PE ownership

𝐂𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 𝐖𝐢𝐭𝐡𝐨𝐮𝐭 𝐂𝐨𝐦𝐩𝐥𝐞𝐱𝐢𝐭𝐲 💼 From Investment to Integration: How VCs Unlock Real Value Post-Acquisition Acquiring a business is only half the battle. The real challenge for Venture Capital and Private Office investors begins after the deal closes — when the need to integrate, streamline, and extract value becomes immediate. Most firms focus on strategy and structure. But behind every successful investment portfolio lies something far less glamorous… yet far more critical: finance systems that can scale. At Bridgewey, we often see the same pain points play out: 💸 Fragmented finance and reporting systems across portfolio companies ⏳ Delays in consolidated data and month-end close 📉 Limited visibility into cash flow, risk, and performance drivers 🧩 Manual processes that block portfolio insight and valuation clarity These aren’t just operational frustrations — they impact decision speed, fund performance, and investor confidence. 🔍 How Bridgewey Helps We partner with VCs to build a single source of financial truth across their portfolio. That means: Implementing scalable ERP or finance systems like that unify financial data across entities Streamlining consolidation, reporting, and KPI visibility Designing standardised chart-of-account frameworks that support investment growth and exits Providing post-acquisition system assessments and integration roadmaps to reduce inefficiency from day one When your portfolio can produce real-time financials, model forecasts instantly, and surface key insights across multiple entities — you move from reactive reporting to proactive value creation. ⚙️ Why It Matters Because in 2025, investors aren’t just buying businesses — they’re buying data agility. The ability to understand what’s happening across your holdings today, not three months from now, is what separates leaders from laggards. Bridgewey helps ensure every investment you make is backed by strong finance infrastructure, clean data, and scalable systems that accelerate value. 💡 If your 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐝𝐚𝐭𝐚 𝐢𝐬𝐧’𝐭 𝐭𝐚𝐥𝐤𝐢𝐧𝐠 𝐭𝐨 𝐞𝐚𝐜𝐡 𝐨𝐭𝐡𝐞𝐫, it's time 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐭𝐡𝐞 𝐬𝐲𝐬𝐭𝐞𝐦𝐬 𝐝𝐨 𝐭𝐡𝐞 𝐡𝐞𝐚𝐯𝐲 𝐥𝐢𝐟𝐭𝐢𝐧𝐠 — so your people 𝐜𝐚𝐧 𝐟𝐨𝐜𝐮𝐬 𝐨𝐧 𝐠𝐫𝐨𝐰𝐭𝐡, 𝐧𝐨𝐭 𝐫𝐞𝐜𝐨𝐧𝐜𝐢𝐥𝐢𝐚𝐭𝐢𝐨𝐧. #VentureCapital #PrivateEquity #FinanceTransformation #ERPIntegration #PortfolioManagement #DataDrivenDecisions #Bridgewey

The Rise of Services Roll-Ups and the Permanent Capital Model From speaking with operators in the space, it’s clear that the permanent capital approach is gaining real traction, not just in software, but across a growing number of service-based industries. Many operators describe how the roll-up model is creating exciting opportunities in sectors that are essential, cash generative, and naturally resilient through economic cycles. What stands out most is the mindset shift. Rather than chasing quick exits, these groups are building long-term, sustainable platforms designed to compound value over a decade or more. It’s a patient, disciplined approach that mirrors what we’ve seen succeed in software, but applied to industries that form the backbone of everyday life. From my perspective, this evolution of the roll-up strategy feels like one of the most interesting trends in the market right now. For finance leaders and operators alike, it’s changing how we think about growth, ownership, and enduring value. #PermanentCapital #RollUpStrategy #PrivateEquity #GrowthInvesting #CaminoSearch

Growth isn’t always funded. Sometimes, it’s found. When organizations reclaim hidden capital, they do more than reduce cost — they restore agility. Freed capital creates room for new hires, market expansion, and innovation that was previously deferred. Efficiency isn’t a back-office function. It’s a growth engine. #StrategicGrowth #CapitalRecovery #ExecutiveLeadership #OperationalExcellence #BusinessPerformance #ValueCreation

💡 The Future of Private Equity Is All About Post-Acquisition Operational Value Add The next era of private equity won’t be defined by financial engineering or multiple expansion — it will be defined by what happens after the deal closes. Post-Acquisition Operational Value Add (PAOVA) is now the true differentiator. In today’s market, where leverage is more expensive and competition for great assets is fierce, returns are created in the boardroom and on the factory floor — not in the term sheet. Here’s what that means in practice 👇 ⚙️ Operational execution > leverage — driving efficiency, pricing, and growth discipline is now where alpha lives. 📊 Human capital & data as value drivers — aligning leadership, incentives, and insights around value creation outcomes. 🤖 Technology as an enabler — firms using AI, automation, and advanced analytics to accelerate decision-making and impact. 🏗️ Operating Partners as architects of value — turning playbooks into performance across every portfolio company. The most successful firms aren’t those that simply buy better — they’re those that build better. #PrivateEquity #ValueCreation #OperatingPartners #PortfolioOperations #Leadership #Technology #AI #DataDriven #HumanCapital #PressAndAssociates

Transitioning from services to products is one of the toughest balancing acts in Private Equity-backed software firms. The fear: sacrificing today’s revenue for tomorrow’s valuation uplift. The reality: it’s possible to protect both. A few strategies I have used which may be of interest: 🔹 Repackage services into product-led accelerators – instead of selling custom work, bundle it as “implementation packs” or “adoption sprints” tied directly to the core product. 🔹 Tiered licensing with service credits – offer service hours baked into product contracts, creating predictability for both client and investor. 🔹 Hybrid renewal models – maintain service revenue in year one, but structure renewals to phase out bespoke work and replace it with recurring product modules. 🔹 Invest in customer success early – what used to be consultancy shifts into scalable onboarding, training, and support—protecting ARR while cutting delivery costs. The goal: transform the P&L without triggering a revenue cliff. Done right, the business grows ARR while sustaining trust with clients and investors alike. #PrivateEquity, #SoftwareTransformation, #SaaSScaling, #ProductLedGrowth, #RecurringRevenue, #TechStrategy

“Every client is different.” I hate to say it… That’s the lie keeping firms stuck. Every client’s different, sure. But their problems? Shockingly similar. ➡️ Cash flow. ➡️ Growth planning. ➡️ Profit leaks. ➡️ Decision paralysis. Once you solve these once, you can solve them again and again. That’s what productized advisory does. You turn messy, custom work into clean, repeatable systems. It’s not less valuable. It’s more valuable because it’s consistent, predictable, and scalable. Stop hiding behind “every client is different.” Start building something clients can actually buy. That’s why Advisory as a Product is where the space is going.

From our conversations with firms, many don't have standardized processes for delivering advisory consistently. That’s what the Positioning Suite™ is fixing. It helps firms standardize how they define, package, and launch advisory. We’re inviting a few more firms to join the Founders Program, a small group helping shape the Positioning Suite™ and how advisory is positioned, standardized, and scaled across the industry. Shoot me a DM and if you want in. Here's a sneak peek... That’s what the Positioning Suite™ is fixing. It helps firms standardize how they define, package, and launch advisory. We’re inviting a few more firms to join the Founders Program, a small group helping shape the Positioning Suite™ and how advisory is positioned, standardized, and scaled across the industry. Shoot me a DM and if you want in. Here's a sneak peek...

𝗠&𝗔 𝗗𝗲𝗯𝗮𝘁𝗲: 𝗪𝗵𝗲𝗿𝗲 𝗗𝗼𝗲𝘀 𝗩𝗮𝗹𝘂𝗲 𝗥𝗲𝗮𝗹𝗹𝘆 𝗗𝗶𝗲? 💔 The common narrative for M&A failure points to strategic misalignment, but for services organisations, the immediate threat is operational paralysis caused by a lack of a centralised platform. The moment two firms merge, the strategic promise is sabotaged if teams are forced into decentralised chaos—multiple spreadsheets, different billing engines, and separate project tools. This friction guarantees that your essential post-merger transition efforts will fail: ◆ 𝗭𝗲𝗿𝗼 𝗩𝗶𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆: You have no single source of truth for the combined entity's resource capacity or real-time profitability. ◆ 𝗖𝗵𝗮𝗻𝗴𝗲 𝗥𝗲𝘀𝗶𝘀𝘁𝗮𝗻𝗰𝗲: Employees, already facing transition, resist new processes that are fragmented and inefficient, leading to low adoption rates of the new operating model. ◆ 𝗗𝗲𝗹𝗮𝘆𝗲𝗱 𝗩𝗮𝗹𝘂𝗲: Project delivery slows down, billing cycles lengthen, and you cannot demonstrate the financial synergies promised to the market. Successful transformation isn't a culture fix; it's a process optimisation. It requires immediately providing a unified foundation—like having your Professional Services and Financial Management all on a single platform—to make change successful. Is your firm equipped to lead business change with certainty? Learn how to establish operational control and navigate transition smoothly at our workshop in the comments. #M&A #BusinessTransformation #ProfessionalServices #ChangeManagement #Certinia

A critical, often overlooked M&A failure point: the operational chaos caused by fragmented systems. It's not just strategic misalignment; it's the immediate operational paralysis that sabotages the value promise. A unified platform is a crucial part of the non-negotiable foundation for successful integration. Thanks Tom Hunt for this valuable piece!

𝗔𝗿𝗲 𝘆𝗼𝘂𝗿 𝗶𝗻𝘁𝗲𝗿𝗻𝗮𝗹 𝗽𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 𝗮𝗹𝗶𝗴𝗻𝗲𝗱 𝘁𝗼 𝘆𝗼𝘂𝗿 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆—𝗼𝗿 𝘁𝗼 𝗻𝗲𝘅𝘁 𝗾𝘂𝗮𝗿𝘁𝗲𝗿’𝘀 𝗵𝗲𝗮𝗱𝗹𝗶𝗻𝗲𝘀? “Show me the incentive and I’ll show you the outcome.” – Charlie Munger Many value initiatives fail—not because the ideas are bad, but because the “nails” that hold them together are missing. A strong value-based management system: ✅ 𝗔𝗹𝗶𝗴𝗻𝘀 structure, strategy, and incentives ✅ 𝗦𝘂𝗽𝗽𝗼𝗿𝘁𝘀 decision-making at the right level ✅ 𝗗𝗿𝗶𝘃𝗲𝘀 coordination, accountability, and agility Private equity and venture firms know this well. They align management directly with value creation—and they make winning matter. No matter how exciting your strategy sessions are, teams revert to old habits if incentives point them that way. And you’ll still miss the next big opportunity. 𝗚𝗼 𝗯𝘆 𝘄𝗵𝗮𝘁 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗱𝗼, 𝗻𝗼𝘁 𝘄𝗵𝗮𝘁 𝘁𝗵𝗲𝘆 𝘀𝗮𝘆 Financial news obsesses over quarterly “beats” and “misses.” But that’s noise, not investor priority. In 𝘚𝘵𝘰𝘱 𝘵𝘩𝘦 𝘘𝘶𝘢𝘳𝘵𝘦𝘳𝘭𝘺 𝘔𝘢𝘥𝘯𝘦𝘴𝘴! we studied Russell 1000 companies to see what really drives returns: 📈 𝗦𝗵𝗼𝗿𝘁-𝘁𝗲𝗿𝗺 (𝟭 𝗾𝘂𝗮𝗿𝘁𝗲𝗿) – Beating EPS estimates mattered more than growing EPS. • Beat/match? +1% stock pop—even if earnings didn’t grow. • Miss? –1% drop—even if earnings grew. 📈 𝗟𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 (𝟰–𝟭𝟮 𝗾𝘂𝗮𝗿𝘁𝗲𝗿𝘀) – The results flipped. • Companies growing EPS in 2/3+ of quarters delivered the best TSR, regardless of beats or misses. • The longer the horizon, the stronger the impact. So why are so many internal processes designed for short-term optics instead of sustained value creation? 𝗪𝗵𝗮𝘁 𝘁𝗼 𝗱𝗼 𝗶𝗻𝘀𝘁𝗲𝗮𝗱 ✅ 𝗣𝗹𝗮𝗻 𝗳𝗼𝗿 𝘀𝘂𝗰𝗰𝗲𝘀𝘀 Make planning about value creation, not target negotiation. When tied to incentive hurdles, planning devolves into sandbagging. Separate the two—free planning to explore bold opportunities and the investments to pursue them. ✅ 𝗖𝗹𝗼𝘀𝗲 𝘁𝗵𝗲 𝗰𝗿𝗮𝗰𝗸𝘀 𝗶𝗻 𝘃𝗮𝗹𝘂𝗲 When capital feels “free,” P&L-based incentives distort decisions. Use 𝗘𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗣𝗿𝗼𝗳𝗶𝘁, which factors in both earnings and the capital to produce them. This balances growth, margins, and returns—empowering teams to manage capital as if it were their own. ✅ 𝗣𝗮𝘆 𝗳𝗼𝗿 𝗿𝗲𝗮𝗹 𝗶𝗺𝗽𝗿𝗼𝘃𝗲𝗺𝗲𝗻𝘁 TSR reflects changes in value. S&P 500 firms with above-median Residual Cash Earnings (RCE) growth outperformed peers by +𝟱.𝟲% 𝗮𝗻𝗻𝘂𝗮𝗹𝗹𝘆. Align incentives with shareholders by paying for real value creation—and pair it with a planning process that unlocks it. 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝗶𝘀𝗻’𝘁 𝗷𝘂𝘀𝘁 𝘄𝗵𝗮𝘁’𝘀 𝗼𝗻 𝗮 𝘀𝗹𝗶𝗱𝗲, 𝗶𝘁’𝘀 𝘄𝗵𝗮𝘁 𝘆𝗼𝘂𝗿 𝘀𝘆𝘀𝘁𝗲𝗺𝘀, 𝗺𝗲𝗮𝘀𝘂𝗿𝗲𝘀, 𝗮𝗻𝗱 𝗶𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲𝘀 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗲𝗻𝗰𝗼𝘂𝗿𝗮𝗴𝗲 𝗽𝗲𝗼𝗽𝗹𝗲 𝘁𝗼 𝗱𝗼. 𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻: How is your organization aligning itself to focus on long-term value creation?