At last month’s ACG DealMAX conference in Las Vegas, we heard a somewhat surprising but perhaps fair question more than once. “Why is a PR firm here?”
DealMAX is one of the largest annual gatherings in the middle-market deal ecosystem. While there are panels and parties to attend and piles of business cards to bring home, the driving force of the event is always the private equity version of speed dating. This year it consisted of more than 21,000 face-to-face meetings, in which getting deals done is first, second, and third on the agenda. Private equity sponsors, lenders, investment bankers, family offices, and founder-led businesses were all talking about deal flow, debt markets, valuation gaps and whether anyone could guess what the Fed was going to do next. That said, there was little pretense regarding why everyone was there.
So yes, to a casual observer, PR professionals might seem a little out of place. But attendees only needed to listen to the many panel discussions regarding delayed exits, fundraising pressures, cautious lenders and seven-year holds, to understand why folks like us choose to attend. In today’s challenging marketplace, communications is a key part of the value creation playbook.
Communications in the private market ecosystem
During the easy-money era, firms could rely on abundant capital and leverage, and multiple expansion, to drive returns. A well-performing company with access to financing could usually find a buyer. The math did a lot of the heavy lifting. That is certainly not the case today.
Everyone is trying to figure out how to stand out in a market where access to capital alone is no longer a differentiator. When every private equity firm says it is “operationally focused,” every lender claims to be “relationship-driven,” and every portfolio company says it is “well positioned for growth,” those words stop meaning as much.
An interesting undercurrent throughout the conference was how often conversations have drifted away from financial engineering and toward credibility, positioning and trust. Buyers are scrutinizing “adjusted EBITDA” more carefully than they did a few years ago. Multiple speakers acknowledged the market has become less willing to underwrite hypothetical growth and more focused on durable performance, real cash flow and management quality. Narrative matters, but it has to be believable and supportable.
That shift changes how and when firms should be thinking about communications. Fundraising is an obvious example. While more firms are competing for capital, LPs are becoming increasingly selective. In this environment, visibility and thought leadership are no longer “nice to have” marketing exercises. Firms want, and need, to demonstrate expertise in verticals, such as healthcare, industrials, private credit or consumer. They need to show they understand the market, are well-connected in their focus verticals, and not just participate in it. That is part of the reason many private market firms are investing more heavily in executive visibility, media strategy and content.
The same dynamic is happening in deal sourcing, as founder-owned businesses are increasingly seeking more than capital. They want guidance, operational support and confidence that the buyer sitting across the table understands their industry, culture and long-term goals. At DealMAX, several panelists discussed how founders are paying closer attention to reputation and alignment during sale processes, especially in the lower middle market. As much as ever, market perception influences who gets invited into the room and what results from that conversation.
Another theme from the conference was that operational value creation is more important in a market where leverage and multiple expansion are less reliable. Speakers talked about the imperatives of technology implementation, customer acquisition, employee retention and operational efficiency, all of which should be demonstrated and communicated regularly.
Whether a firm is integrating acquisitions, repositioning a company, entering a new market or trying to retain talent during a five-to-seven-year hold, messaging is critically important. Employees need clarity. Customers need reassurance. Buyers need confidence. Lenders need transparency.
Building credibility
As with most of the DealMax panel discussions, this blog wouldn’t be complete without a discussion of AI. There was no shortage of conversations about disruption, automation and productivity as investors try to determine which companies have a cogent plan to harness the power of AI and which companies are simply sprinkling “AI-enabled” into every pitch deck. The difference between the two is credibility, which is built over time through consistent positioning, thoughtful leadership, strong messaging and market visibility.
PR professionals like us belong at DealMAX because reputation, trust and differentiation are increasingly important in a slower, more competitive and more selective private markets environment. The firms that communicate clearly are often the firms perceived to be more credible. The firms that look more credible are often the firms that get the meetings, attract capital, and get deals done. They are also those that foster confidence during periods of uncertainty.