Gone are the days of multiples arbitrage and financial engineering to bolster exit valuations. Rising complexity and competition in private equity require firms to respond with disruptive, high-return approaches. Top-quartile firms commonly focus on portfolio companies’ operational excellence and industry differentiation to secure their investments. Today, we meet a firm that leads with an innovative competitive strategy—solving the value creation puzzle by accelerating portfolio companies’ top-line growth.
Taking an Innovative Approach to Value Creation
“We provide a focused ability on how to get there – a pipeline. It’s about creating focus and visibility to progress.” – Brian Potts, Operating Partner, One Rock Capital
This episode of Expert Insights Series, hosted by Blue Margin Co-Founder Jon Thompson, features operating partner Brian Potts of One Rock Capital. During diligence, Brian assesses investment growth potential, and post-acquisition, he sets and executes portfolio companies’ sales and marketing strategies. He has 25 years of experience building and improving businesses; holding leadership positions in manufacturing at Cintas and Clarus, in media at The Nielsen Company, in consumer products at Blue Triton Brands, and in PE at GE Capital, Antares Capital, and The Riverside Company.
One Rock Capital Partners, founded in 2010, is an operationally focused private equity firm with offices in New York and L.A. Mitsubishi Corporation serves as their strategic partner, providing access to a global resource network. With $5.1bn of cumulative capital commitments and 16 active platform companies, One Rock invests in chemicals and process industries, specialty manufacturing and healthcare products, business and environmental services, and food manufacturing and distribution.
Disclaimer: The views and opinions expressed in this interview are Brian’s and do not necessarily represent the views and opinions of One Rock Capital.
Watch the full interview, listen to the podcast, or read the interview highlights below.
Principal Themes:
- For value creation, start by addressing the sales pipeline
- How to build successful partnerships with an entrepreneur-owner
- The importance of addressing a portco’s data capability post-acquisition
- Private equity’s evolution from mercenary to incubator mindset
Igniting Top-Line Growth: A Perspective on Portfolio Company Value Creation
“It goes back to the multiples people are having to pay. You cannot do it with cost. You must do it by growing the business.” – Brian Potts
Not long ago, private equity was singularly focused on operational excellence—managing the bottom line. But record-high multiples have forced operating teams to find new ways to increase return percentages. In response, Brian believes private equity should also attack the top line to achieve unprecedented returns. Many companies have ambitious sales targets without a concrete execution plan, which is why sales and marketing operating partners are becoming more common.
Brian’s team uses a consistent process for strategizing top-line growth. Having applied this process to 100+ companies, One Rock has learned how to systematically grow sales pipelines. With that foundation, they lead management teams through questions including: “Where do you see the most growth potential? What is your current process for achieving that? How well do you understand your target client and your competitors? How big is the addressable market?” Through this process, Brian helps management teams develop and take ownership of a focused strategy for organic growth that’s backed by data.
Partnering with an Entrepreneur Owner? Honor the Past and Plan for the Future
“I believe in having a very respectful nod to the past. A lot of what they have, what they did, worked.” – Brian Potts
One Rock focuses on carveouts and family businesses using a hands-on approach, so creating a bond with owners during diligence and post-acquisition is crucial. While many PE firms press a prescriptive methodology during the first 100 days following acquisition, One Rock sets a different tone—first acknowledging the past, then building from that foundation.
Brian advocates using questions that invite owners to dream about future growth, such as: “How did you get to this point? Where do you want the company to be in five years? What do you think would get you there?” These questions establish respect and a collaborative working relationship.
Data Visibility: One Rock Capital’s First Step with New Portfolio Companies
“We start talking about our exit strategy on the day we acquire. Can an owner tell a story with their data? Are we happy with the story?” – Brian Potts
Post-acquisition, One Rock assesses a company’s level of data visibility, believing that data capability speaks volumes about overall organizational health. While most companies report lagging indicators, Brian looks for visibility into leading indicators: What metrics are they measuring and managing?
After this assessment, One Rock establishes a set of core metrics on a simple-to-read dashboard. In contrast to an airplane cockpit filled with gauges, Brian advocates for a minimal, motorcycle-style dashboard with only essential information. Reducing noise to the key value drivers takes work, but, as Brian says, “the value it creates for us later is tremendous.”
From Mercenary to Incubator Mindset: Private Equity’s Evolution
“The quality of what you sell matters at this point. You can’t just cobble a few things together and hope for multiples arbitrage and run.” – Brian Potts
In earlier eras of private equity, acquiring and selling companies could resemble flipping houses. Brian estimates 40–50% of firms operated in a mercenary “cut ’em and gut ’em” mode, relying on multiples arbitrage or financial engineering rather than actively improving portfolio companies. Today’s competitive landscape invalidates that approach, requiring firms to actively improve their portfolio companies or face obsolescence. By increasing the quality of their companies—market positioning, sales growth, operational efficiency—One Rock increases buyer confidence.
Connect with Brian and One Rock Capital
Interested in connecting with Brian? You can find him on LinkedIn or through One Rock Capital.
About Blue Margin
Blue Margin helps PE and mid-market companies quickly convert data into automated dashboards, the most efficient way to create company-wide accountability to the growth plan. We call it The Dashboard Effect, the title of our book and podcast. Our mission is to accelerate your value creation plan.
