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Operating Partner #210

Happy Thursday <<First Name>>

Apologies for not sending the OP last week. I was in New York for a 72 hour business trip and did not have the right laptop to publish this letter. Sounds weird but my work laptop does not like Mailchimp so I need to use my own Macbook Pro when home.

Speaking of NYC, I got to see some of you while doing 15 meetings over a 72 hour period. It was awesome to be back in Manhattan, spending time in person, and feeding off the energy. The hard part of everything was catching up on emails after the fact as I was basically offline for 72 hours.  I made my ride back to Boston on the Acela one productive email session.

If you are in the job market - or contemplating a new role, make sure to check out the career/job section down below. There are lots of roles across a variety of companies.

OK - to get us started, here are some fun links to read:

I hope you enjoy this OP - as always, please reach out with any questions or ways to help make this better.

-Darren

What Is An Operating Partner?

I receive many emails and inquiries with a similar question, “What is an Operating Partner at a PE fund?” I figured I’d use OP #210 to describe the specific role that I have and some of how a PE fund is structured. Other people have written about this topic too and offer some good thoughts.

Let me start by caveating two things:

1/ Not all PE funds are the same. Every fund looks at the world thru a different kaleidoscope and, therefore, may organize differently. So use my examples as one data point in your understanding of how PE funds are arranged

2/ I am now going on year six of my Operating Partner role, and as I’ve learned through my other Operating Partner friends at other funds, an Operating Partner is a term with many job descriptions. So, every time you hear the word Operating Partner, you may want to ask a bit more as the role differs. More on that below.

OK, let us begin.

In short, a PE (private equity) fund invests capital into businesses to increase their value and at some point in the future, will create a liquidity moment (public offering, change in control, dividend, etc.) so that shareholders can get paid. 

The time horizon I use to reach liquidity is 5-7 years from the initial investment. Note, investments can reach a liquidity moment pre-5 years, and others reach that moment post-7-years.

There are three core functions (in my mind) that a PE firm must have to be successful.

1 - Investment team. This is the team, also called “deal,” that comes up with hypotheses and scans the market for opportunities to invest. Some funds are super reactionary and wait for investment bankers to reach out with CIMs (confidential investment memorandums) - a fancy word for “deck of a business for sale.” The way this team operates varies across funds but is most often what you see when PE funds are portrayed in TV and movies.

2- Portfolio team. This is the group of people responsible for the life of the investment during its time with the fund. This group partners with the CEO and management team and tries to be as helpful as possible to increase the velocity of the business. Some funds have massive portfolio teams, and others do not have them at all. In some smaller funds, the investment team is the portfolio team.

3- Administration team. These folks behind the scenes enable the fund to operate by handling all finance, administration, technology, investor relations, fundraising, and more. These roles often go way overlooked but significantly enable the fund(s) to be most impactful.

But where is the Operating Partner?

It depends on the fund but usually sits in #2, the Portfolio team, above. I say this based on the dozen-plus OPs that I’ve met in my time.

Here are all the different incarnations of an Operating Partner that I’ve come across. Note, there is no right or wrong, and often multiple descriptions are grouped:

  • A full member/partner of the fund is the senior-most position prior to becoming a Managing Director.

  • A full member/partner of the fund is a subject matter expert (SME) on a particular topic such as digital, procurement, operations, or go-to-market

  • An advisor to the fund who lends credibility and help on an as-needed basis

  • A near full-time consultant who is an SME on a specific topic

  • A near full-time consultant who is not an SME but rather a generalist who helps with portfolio companies

I’m sure there are 1-2 that I forgot about.

The description of my role as an Operating Partner is a mashup of a couple of the bullets above. I am a partner of the fund, an SME on a particular topic (digital, growth), and the senior position on the portfolio side before becoming a Managing Director.

So what are my day-to-day responsibilities?

I spend about 70% of my time with 3-4 companies, and the remaining 30% is split between the rest of the companies in our portfolio, deal pursuits that are happening, diligence that we are in the middle of, working on building out our talent bench, and building internal knowledge about my topical area.

The 3-4 companies that I am concentrating on often change - usually every 60-90 days - one rotates in/out or so. There’s no magic formula, just what I have observed in this role over the past five years.

I have broken my role down into five areas:

  • Talent: do we have the right senior functional leads at our portfolio companies (or deal pursuits) to drive asymmetrical returns? These are the roles of Chief Marketing Officer, Chief Digital Officer, Heads of E-Commerce, and digital Chief Product Officer.

  • Process: do we have the proper process and KPIs in place to allow us to move fast? 

  • Partners: do we have the right partners in place to enable us a better chance of winning? Managing all the partners and getting their A-Team(s) 

  • Technologies: do we have the right ad/martech and commerce/sales tech stack to allow us to scale and run effectively and efficiently?

  • Network Effects: how can I leverage our world-class leaders across our portfolio to enable them to connect and learn from one another

So that’s at a high level of what I do daily. Again, all Operating Partner jobs are slightly different, so always ask clarifying questions when meeting with folks about an OP position.

Jobs From the OP Community

From time to time, I publish jobs across the OP community and within my portfolio in this newsletter. If you have a job/role that you want to promote, please send me a paragraph such as the ones below.  I do not charge for promoting jobs in the newsletter but they must be relevant to this community. I reserve all rights (s) to approve/publish jobs. 

Retention Marketing Manager. Bobs Discount Furniture. In this role, you’ll be responsible for managing our retention practice at Bob’s, delivering data-driven growth, enhancing our customer data & delivering messages across all CRM channels. Reporting to our Director of Customer Relationship Management, you’ll help drive loyalty and advocacy for our fast-growing business to drive metrics, including repeat purchase and lifetime value (LTV). You’ll utilize our Customer Data Platform (CDP), modern marketing automation SaaS partners, and best practices to help identify, socialize, and employ insights to improve customer activation.

Global Head of Sales Enablement. Mixpanel. Mixpanel is looking for a Global Head of Sales Enablement to drive the next chapter of explosive growth. You will serve as a critical partner for all of our GTM teams by defining the Sales Enablement strategy, developing/delivering learning interventions and supporting artifacts/materials, facilitating training sessions tailored to our key buyer personas, and providing thought leadership across the organization. You'll also be responsible for identifying opportunities for improvement, building robust processes, and driving transformation through effective change management and communication to the Sales organization.

Landing Page Operations Specialist. Blue Nile. Blue Nile is looking for a rock star landing page expert to join our team. In this role, you would be responsible for designing and building the performance marketing team’s landing pages, to drive millions of dollars of growth through conversion rate improvements. This is a key role for the company. You have the opportunity to make a big difference and be recognized for it.

Senior Director of Americas Marketing. Signifyd. Signifyd is looking for a Senior Director of Americas Marketing to join our Marketing & Alliances team and report to the CMO. You will be in the driver's seat for all marketing in our largest market, overseeing programs and strategy in the pursuit of a qualified pipeline. This is the ultimate finishing school for future CMO roles. Our market (D2C ecommerce) is both broad and deep - we serve a few thousand customers, from startups (with partners like Shopify and BigCommerce) to high-growth brands (Vuori, Rad Power Bikes) to household names (Walmart, Samsung, eBay, etc.). You will have the unique market tailwind and career opportunity of scaling a multi-segment GTM engine. You will lead a team of 6 (growing to 8 in the very near term) to achieve pipeline goals across those segments.

Sr. Product Manager, Collectibles Authentication. eBay. You will be joining as the authentication program manager for collectibles categories on eBay. This brand new business will require project tracking for enhancements and releases, as well as ongoing management of business metrics and performance. You are highly analytical, organized and extremely detail oriented. Weekly status updates, business reporting on metrics, and Gantt charts are all areas you excel and can hit the ground running.

Director of Talent. Loupe. We pride ourselves on making it easy and fun to partake in card collecting. You don’t need to love sports or sports cards to work at Loupe. We only ask that you share our vision of creating a better destination for the community of collectors. Together, we can do better —  and we can make a lot of people happy along the way. As the Director of Talent, you will be the inaugural hire to the people team. Your role is both tactical and strategic, working with leaders across the organization to develop and implement a talent strategy that supports the growth plan of the company. You will lead both talent management and talent acquisition as Loupe continues to grow and scale. 

Product Designer. Dibbs. We are seeking a talented product designer to join our product team. This individual will be accountable for the visual design and user experience of our mobile and web applications. They will partner with product, marketing, and engineering teams to bring designs to life and continue to ideate, prioritize, and problem-solve to drive key results. As part of our team, they will be crafting and articulating the product vision through strong rationale, visualization skills, and intuition. This role will be responsible for all aspects of end-to-end experience design by utilizing flow diagrams, interactive prototypes, high fidelity mockups and ready-for-production designs to illustrate ideas and direction.

Product Manager, Card Development. Fanatics. Fanatics Collectibles is a new company working at the intersection of collectibles and technology. Backed by some of the best investors, sports properties and operators in the world, we are integrating with Fanatics’ global digital sports platform – which includes 900 sports relationships and more than 81 million reachable fans - to reimagine the collectibles business for the 21st century. The Project Manager (PM) is responsible for scheduling and monitoring the development of trading card products. This position interfaces with internal teams and external vendors to ensure the timely execution of all deliverables.

Senior Symfony Software Engineer. BSN Sports. Varsity Brands Innovations department is currently seeking a Senior Symfony Software Engineer to join our growing development team. The Senior Symfony Software Engineer would be responsible for helping to detail systems documentation, architecture, integrations, and API’s. To contribute to the architecture and implementation of multiple Symfony-based custom PHP applications.  Work with business requirements to create Internal back-end development estimates, evaluate external back-end development estimates and Symfony developer skill sets. To help maintain the applications dev ops processes and helping to keep applications current with updates and standards.

Articles To Read

Yuga Labs: Beginning of the Web 2.5 Enterprise (Bits of Signum)

Uber Reaches Deal To List All NYC Taxis On It’s App (WSJ)

The Top 10 Brand Audio Logos Ranked by Effectiveness (AdAge)

Why OrangeTheory Hired Steve AOKI As Their Chief Music Officer (AdAge)

Why Doesn’t Wall Street Like Advertising? (Mike Shields)

Metaverse And Web3 Marketing Glossary - Key Words To Know (AdAge)

Apple’s Been Preparing for the New World Order (Loup Funds)

Google Makes a Move to Take On Shopify, Amazon, and Walmart (The Street)

You Don’t Know Much About Jay Penske. And He’s Fine With That (NYT)

NFT Collection Failures Begin to Mount In Flashback to ICO Bust (Bloomberg)

How the NFT Metaverse Worlds Battle Brands For the Future of Web3 (AdAge)

Morning Brew Tops 4M Newsletter Subscribers (CNBC)

Mint Collective a Different Kind of Show (Sports Collectors Daily)

How Leading Companies Use Machine Intelligence (McKinsey & Company)
Where Did Americans Move in 2021? (Fast Company)

Elon Musk Is Right. Web3 Is BS. (Maciej Baron)

It’s Time To Move Away From Gmail (Jim T Dev)

The Sports Card Industry Is Having a Tech Revolution, And This Company Wants to Lead the Charge (Forbes)

Thank You for Reading

Thanks for reading OP #210. I hope you enjoyed this OP.

Durhamism # 1140: "Go the extra mile. It's never crowded."

Darren / @dherman76
Copyright © 2022 Operating Partner, All rights reserved.


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