Growth Isn't Value: The PE Playbook for Privately Held Businesses | This Is M&A

Most privately held business owners believe growing revenue automatically makes their company more valuable. Buyers disagree. And that gap is exactly where deals get discounted. In this episode of This Is M&A, Mike de Windt, Managing Director of Strategic Advisory at Carleton McKenna & Company, breaks down what actually drives shareholder value in founder-led and family-owned businesses, the hidden levers sophisticated buyers price into every deal, and why applying private equity discipline before you ever think about selling is the highest-leverage move any owner can make. Mike brings over 30 years of experience across private equity, operating leadership, and strategic advisory. He was the founder and CEO of Gates Group Capital Partners, a Cleveland-based PE firm with over $300 million in capital under management and more than $850 million in aggregate enterprise value across realized investments. He also founded Grand River Industries and served on the corporate development team at NACCO Industries. Today at Carleton McKenna, he works directly with founder-led and family businesses to close the gap between where they are and what buyers will actually pay a premium for. In this episode, you will learn: ⚡️ Why revenue growth without margin expansion and cash flow conversion can actually reduce your valuation in the eyes of buyers ⚡️ The three-legged stool of value creation: strategy, scalable business model, and repeatable, predictable economics ⚡️ What the hidden levers really are: quality of earnings, pricing discipline, management incentive alignment, and reducing key person dependence ⚡️ Why the annual operating plan is a core management tool, not a box to check for your lender ⚡️ How to build a business that gives you real optionality: sell, recap, or keep growing on your terms Learn more about Mike de Windt and Carleton McKenna & Company: Website: https://www.carletonmckenna.com LinkedIn:   / mikedewindt   Email: [email protected] Connect with your host, Steven Monterroso: LinkedIn:   / determined2succeed   Follow This Is M&A Podcast on LinkedIn:   / this-is-m-a   Want to become our next guest? Sign up or subscribe: https://sharevault.com/this-is-ma/ Listen now on Apple Podcasts, iHeartRadio and Spotify. Timestamps 00:00 — Intro: Meet Mike de Windt 03:01 — Growth Isn't Value: Here's Why 06:10 — How Mike Sizes Up a New Client 13:47 — Getting Your House in Order First 22:16 — The Three-Legged Stool of Value Creation 30:25 — Hidden Levers Buyers Actually Pay For 41:48 — Why Most Companies Skip the AOP 50:00 — Running the Business Like You'll Sell It 57:58 — Founders vs. Professional Management 01:05:08 — Mike's Path and How to Reach Him #thisismapodcast #mna #privateequity #exitplanning #lowermiddlemarket #shareholdervalue #ebitda #founderstories #mnadvisory #operationalexcellence