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💼 Private Equity Weights

Adjust section and question weights. Changes affect future evaluations only.

Section Weights
Management & Team
16%
Industry & Market Position
14%
Financial Profile
16%
Value Creation Plan
14%
Deal Structure & Valuation
14%
Exit Strategy
8%
Risk Assessment
8%
Due Diligence Quality
6%
Legal & Tax Structure
4%
Total Section Weight 100%

Section weights are relative — they'll be normalized to 100% during scoring.

CEO/management team track record
%
Prior successes? Industry tenure? P&L ownership experience?
Management bench depth
%
Strong #2s? Can the team execute if CEO departs?
Management incentive alignment
%
Meaningful equity rollover? Performance-based comp? Aligned on exit?
Value creation execution capability
%
Has the team done this before? Operational improvement chops?
Culture and employee retention
%
Low turnover? Strong Glassdoor? Culture of accountability?
Board and governance quality
%
Experienced directors? Active oversight? Right expertise?
Management integrity and transparency
%
Forthcoming in diligence? Consistent narrative? Reference checks?
Succession planning
%
Is there a plan if key leaders leave? Internal candidates ready?

Question weights are relative within the section.

Industry attractiveness (growth, margins, stability)
%
GDP+ growth? 20%+ EBITDA margins? Recurring revenue?
Company's competitive position and market share
%
#1 or #2 in their niche? Gaining or losing share?
Barriers to entry
%
Regulatory moat? Switching costs? Scale advantages? IP?
Market fragmentation and roll-up opportunity
%
Lots of small players? Proven acquisition playbook?
Recession and cyclical resilience
%
How did the industry perform in 2008-09? 2020?
Secular tailwinds
%
Technology adoption? Demographic shifts? Regulation driving demand?
Pricing power and inflation pass-through
%
Can they raise prices? Pass through input cost increases?
End-market diversification
%
Serving multiple industries? Not over-indexed to one sector?
International market potential
%
Domestic only or global opportunity? Geographic expansion?

Question weights are relative within the section.

Revenue growth consistency
%
Steady 10%+ organic growth? Accelerating or slowing?
EBITDA margins vs. peers
%
Above-average for the industry? Expanding or compressing?
Free cash flow generation and conversion
%
FCF/EBITDA > 60%? Low capex needs? Working capital efficient?
Revenue quality (recurring/contracted)
%
% recurring or contracted revenue? Subscription model?
Financial statement cleanliness
%
Limited add-backs and adjustments? Audited? GAAP?
Customer/revenue concentration
%
Top 10 customers <30% of revenue? No single customer >10%?
Working capital dynamics
%
Cash conversion cycle? DSO, DPO, DIO trends?
Capex requirements (maintenance vs. growth)
%
Asset-light? Low maintenance capex? Growth capex discretionary?
Gross margin trajectory
%
Improving, stable, or declining? Input cost exposure?
Quality of earnings assessment
%
Would a QofE report come back clean? EBITDA adjustments reasonable?

Question weights are relative within the section.

Organic revenue growth strategy
%
New products? New markets? Pricing? Cross-sell?
Operational improvement opportunities
%
Procurement savings? SG&A reduction? Process optimization?
M&A / bolt-on acquisition pipeline
%
Identified targets? Realistic multiples? Integration capability?
Margin expansion plan
%
Can EBITDA margins expand 300-500bps? How?
Pricing power and revenue optimization
%
Ability to raise prices? Better product mix? Less discounting?
Technology and digital transformation
%
ERP upgrade? Digital sales? AI/automation opportunities?
Sales and marketing effectiveness
%
Can they improve go-to-market? Better sales team? New channels?
Management upgrade potential
%
Are there roles that need upgrading? Talent gaps to fill?
Geographic or channel expansion
%
New regions? International? E-commerce channel?

Question weights are relative within the section.

Entry multiple (EV/EBITDA) vs. peers
%
At, above, or below market comps? Justified premium/discount?
Leverage conservatism (debt/EBITDA)
%
3-4x is moderate. 5-6x is aggressive. Debt service manageable?
Target IRR and MOIC achievability
%
20%+ net IRR? 2.5x+ MOIC? What has to go right?
Deal governance and protections
%
Board control? Veto rights? Pro rata? Information rights?
Sponsor track record and co-investment
%
Top-quartile fund? Meaningful GP commit? Prior fund returns?
Fee structure fairness (mgmt fee, carry, hurdle)
%
2/20 standard? Preferred return? European waterfall?
Purchase price vs. intrinsic value
%
Paying fair value or a premium? Margin of safety?
Competitive dynamics of the deal process
%
Auction or proprietary? Multiple bidders driving up price?

Question weights are relative within the section.

Exit path clarity (strategic, secondary, IPO)
%
Which exit is most likely? Multiple paths available?
Buyer universe depth
%
5+ strategic buyers? PE firms interested? International buyers?
Multiple expansion potential
%
Can you sell for a higher multiple? Why would a buyer pay more?
Hold period reasonability
%
3-5 year plan realistic? Or might this be a longer hold?
Exit readiness (financials, compliance, presentation)
%
Will the company be sale-ready? Audited financials? Clean diligence?
Dividend/distribution potential during hold
%
Can the business generate distributions while held? Dividend recaps?
M&A environment outlook
%
Will the M&A market be favorable in 3-5 years? Sector trends?

Question weights are relative within the section.

Regulatory and compliance risk
%
Regulated industry? Changing regulations? Compliance costs?
Macro and cyclical risk
%
How bad does a recession hit this business? Revenue decline scenario?
Technology disruption risk
%
AI, automation, or platform risk to the business model?
Litigation and contingent liability
%
Pending lawsuits? Environmental liability? Product liability?
Integration risk (if roll-up)
%
Culture clash? Systems integration? Customer retention post-M&A?
Customer churn and retention risk
%
High switching costs? Long-term contracts? Or at-will?
Supply chain and vendor risk
%
Single source suppliers? Input cost volatility? Tariff exposure?
Cybersecurity and data risk
%
Handling sensitive data? Adequate security? Insurance?
ESG and reputational risk
%
Any environmental, social, or governance concerns? ESG rating?
Currency and international risk
%
FX exposure? Geopolitical risk in operating countries?

Question weights are relative within the section.

Quality of earnings report
%
QofE completed? Major adjustments? Surprises?
Legal diligence findings
%
Material contracts reviewed? Litigation disclosed? IP clean?
Commercial diligence confidence
%
Customer calls supportive? Market study positive? Thesis validated?
Management reference checks
%
Former employers, colleagues, board members — all positive?
Tax structure and diligence
%
Any tax liabilities? NOLs? Structure tax-efficient?
IT and cybersecurity assessment
%
Systems modern? Tech debt manageable? Security adequate?
Insurance adequacy review
%
Properly insured? D&O, cyber, E&O, general liability?
Environmental and compliance review
%
Any environmental liabilities? OSHA compliance? Permits current?

Question weights are relative within the section.

Purchase agreement terms
%
Reps and warranties adequate? Escrow/holdback? Indemnification?
Fund terms and GP economics
%
Reasonable carry/hurdle? Clawback provisions? GP removal rights?
Tax structure efficiency
%
Tax-efficient structure? Blocker entities? K-1 complexity?
Side letter and preferential terms review
%
Any MFN issues? Co-invest allocation fair?

Question weights are relative within the section.

Overall excitement about this deal
%
On a visceral level, does this fire you up? Or feel like settling?
Trust in the people across the table
%
Would you want to be in a foxhole with these people? Eye contact, handshake feel.
Would this be your only investment this year?
%
If you could only make ONE bet, would it be this one?
Portfolio fit and strategic alignment
%
Does this complement our existing investments? Fill a gap?
LP/partner explainability
%
Could you confidently explain this to investors at the next meeting?
Too-good-to-be-true meter
%
10 = no suspicion at all. 1 = something feels off. Trust your spider sense.
Timing and urgency — is the window right?
%
Right time in the cycle? Market conditions favorable? Or are we chasing?
Differentiation vs. other opportunities
%
How does this compare to other deals you've seen recently?
Sleep-at-night factor
%
Can you sleep well after wiring the money? Or will it keep you up?
Regret minimization — would you regret passing?
%
In 5 years, would you kick yourself for not doing this deal?
Information quality — do you know enough?
%
Do you feel well-informed? Or are there big unknowns?

Question weights are relative within the section.