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description: Use this skill for private equity workflows — deal sourcing, deal screening, due diligence checklists, DD meeting prep, unit economics analysis, returns analysis (IRR/MOIC), IC memos, portfolio monitoring, value creation plans, and AI readiness assessments. Triggers on: PE, private equity, deal sourcing, deal screening, due diligence, DD checklist, IC memo, investment committee, portfolio monitoring, IRR, MOIC, returns analysis, unit economics, value creation, 100-day plan.
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# Private Equity

PE workflow skills adapted from [Anthropic's Financial Services reference](https://github.com/anthropics/financial-services). Covers the full deal lifecycle from sourcing through portfolio operations.

## Data Sources
1. **VisionClaw stock_data tool** — public market data for comparable analysis
2. **Web search** — industry reports, company websites, press releases, databases
3. **User-provided data** — CIMs, data room documents, portfolio reports
4. **MCP servers** (if configured) — PitchBook, Chronograph, FactSet, etc.

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## 1. Deal Sourcing

### When to Use
Discovering companies, building target lists, drafting outreach for acquisition targets.

### Workflow
1. **Define criteria**: Sector, size (revenue/EBITDA range), geography, deal type (platform vs add-on)
2. **Build target list**:
   - Industry databases and web research
   - Conference attendee lists, trade association members
   - Competitor analysis of existing portfolio companies
3. **Prioritize**: Score each target on fit, attractiveness, likelihood of transaction
4. **Draft outreach**: Founder/CEO intro emails, broker relationship outreach
5. **Track pipeline**: Maintain deal flow log with status and next steps

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## 2. Deal Screening

### When to Use
Quick pass/fail on inbound deal flow — CIMs, teasers, broker materials. Should take minutes, not hours.

### Screening Table

| Criterion | Target | Actual | Pass/Fail |
|-----------|--------|--------|-----------|
| Revenue range | | | |
| EBITDA range | | | |
| EBITDA margin | | | |
| Growth profile | | | |
| Sector fit | | | |
| Geography | | | |
| Deal size / EV | | | |
| Valuation (x EBITDA) | | | |
| Customer concentration | | | |
| Management continuity | | | |

### Output: One-Page Screening Memo
1. **Verdict**: Pass / Further Diligence / Hard Pass
2. **Bull case**: 2-3 bullets — why this could be a good deal
3. **Bear case**: 2-3 bullets — key risks and concerns
4. **Key questions**: What you'd need to answer on a first call

### Rules
- Be direct about red flags — don't bury concerns
- Flag inconsistent or incomplete financials explicitly
- Save screening criteria in memory for future deals once confirmed

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## 3. Due Diligence Checklist

### When to Use
Organizing and tracking diligence workstreams after signing LOI.

### Workstreams

**Commercial DD**
- [ ] Market size and growth validation
- [ ] Customer interviews (10-15 reference calls)
- [ ] Competitive positioning and win/loss analysis
- [ ] Pipeline and backlog verification
- [ ] Pricing power and contract analysis
- [ ] Customer concentration and churn

**Financial DD**
- [ ] Quality of earnings analysis
- [ ] Revenue recognition review
- [ ] Working capital normalization
- [ ] Capex vs maintenance capex split
- [ ] Pro forma adjustments validation
- [ ] Tax structure review

**Legal DD**
- [ ] Corporate structure and entity review
- [ ] Material contracts review
- [ ] Litigation and regulatory review
- [ ] IP ownership and protection
- [ ] Employment agreements and key person risk
- [ ] Insurance coverage adequacy

**Operational DD**
- [ ] Technology and systems assessment
- [ ] Key employee retention risk
- [ ] Facility and capacity review
- [ ] Supply chain and vendor dependencies
- [ ] Cybersecurity and data privacy
- [ ] Integration readiness

Track: responsible party, status, key findings, red flags, due date.

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## 4. DD Meeting Prep

### When to Use
Preparing for management presentations, expert calls, or customer reference calls.

### Management Presentation Prep
1. **Background**: Company summary, deal context, what we know so far
2. **Key questions by topic**: Financial, operational, strategic, management
3. **Red flags to probe**: Issues identified in screening or early DD
4. **Information requests**: Specific data/documents to request
5. **Assessment criteria**: What does "good" look like on each topic?

### Expert Call Prep
1. **Expert background**: Who they are, why they're relevant
2. **Industry questions**: Market dynamics, trends, competitive positioning
3. **Company-specific questions**: Reputation, strengths/weaknesses vs peers
4. **Diligence questions**: Areas where we need third-party validation

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## 5. Unit Economics Analysis

### When to Use
Evaluating revenue quality — ARR cohorts, LTV/CAC, net retention, payback periods. Critical for SaaS, subscription, and recurring revenue businesses.

### Key Metrics Framework

**Acquisition Economics**
- Customer Acquisition Cost (CAC): Sales & marketing / new customers
- CAC Payback Period: CAC / (monthly revenue per customer × gross margin)
- Sales efficiency: Net new ARR / S&M spend

**Retention Economics**
- Gross Revenue Retention (GRR): (Beginning ARR - Churn - Contraction) / Beginning ARR
- Net Revenue Retention (NRR): (Beginning ARR - Churn - Contraction + Expansion) / Beginning ARR
- Logo retention rate: Retained customers / beginning customers

**Lifetime Value**
- LTV = ARPU × Gross Margin × (1 / Churn Rate)
- LTV/CAC ratio (target: >3x)
- Revenue quality score: NRR × GRR × growth rate

**Cohort Analysis**
- Revenue by cohort vintage (monthly or quarterly)
- Retention curves by cohort
- Expansion revenue by cohort
- Time to break-even by cohort

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## 6. Returns Analysis

### When to Use
IRR/MOIC sensitivity analysis for investment decisions.

### Framework
1. **Entry assumptions**: Purchase price, EV/EBITDA multiple, leverage
2. **Operating scenarios**: Base, upside, downside
   - Revenue growth trajectory
   - Margin expansion/compression
   - Working capital and capex
3. **Exit assumptions**: Exit year (typically 3-5), exit multiple
4. **Returns calculation**:
   - Entry equity = EV - Net Debt
   - Exit equity = Exit EV - Exit Net Debt
   - MOIC = Exit equity / Entry equity
   - IRR = annualized return
5. **Sensitivity tables** (5×5, ODD dimensions):
   - Entry multiple vs Exit multiple → IRR
   - Revenue growth vs Margin expansion → MOIC
   - Leverage vs Exit multiple → IRR

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## 7. Investment Committee Memo

### When to Use
Formal recommendation memo for IC deal approval.

### Structure

**I. Executive Summary** (1 page)
- Company description, deal rationale, key terms
- Recommendation and headline returns (base case IRR/MOIC)
- Top 3 risks and mitigants

**II. Company Overview** (1-2 pages)
- Business description, products/services, customers
- Competitive positioning, management team

**III. Industry & Market** (1 page)
- Market size/growth, competitive landscape, secular trends

**IV. Financial Analysis** (2-3 pages)
- Historical performance, quality of earnings, key drivers

**V. Investment Thesis** (1 page)
- 3-5 pillars of the investment thesis
- Value creation levers (organic growth, margin expansion, M&A, multiple expansion)
- 100-day priorities

**VI. Deal Terms & Structure** (1 page)
- EV, implied multiples, sources & uses, capital structure

**VII. Returns Analysis** (1 page)
- Base/upside/downside IRR and MOIC
- Sensitivity analysis

**VIII. Risk Factors** (1 page)
- Ranked by severity × likelihood, with mitigants
- Deal-breaker risks (if any)

**IX. Recommendation**
- Proceed / Pass / Conditional proceed
- Key conditions or next steps

### Rules
- Be factual and balanced — present both bull and bear honestly
- Don't minimize risks — IC members will find them; credibility matters
- Financial tables must tie (EBITDA bridges, S&U balances, returns math)
- Ask for missing inputs rather than assuming deal terms

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## 8. Portfolio Monitoring

### When to Use
Tracking portfolio company KPIs and performance vs plan.

### Dashboard Format

| Company | Vintage | Entry EV | Current EV | MOIC | Revenue (Act vs Plan) | EBITDA (Act vs Plan) | Status |
|---------|---------|---------|-----------|------|----------------------|---------------------|--------|
| | | | | | | | Green/Yellow/Red |

Per company: Revenue, EBITDA, margin, cash flow, debt paydown, key initiative status.
Flag variances >10% from plan. Require management commentary on yellows/reds.

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## 9. Value Creation Plan / 100-Day Plan

### When to Use
Post-close operational improvement planning.

### Structure
1. **Revenue levers**: Pricing, cross-sell, new markets, sales force expansion
2. **Margin levers**: Procurement optimization, operational efficiency, automation
3. **Strategic levers**: M&A (buy-and-build), geographic expansion, new products
4. **Organizational**: Key hires, management upgrades, board composition
5. **EBITDA bridge**: Current EBITDA → +Revenue initiatives → +Cost savings → Target EBITDA

Timeline: 30/60/90-day milestones with owners and KPIs.

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## 10. AI Readiness Assessment

### When to Use
Evaluating a portfolio company's readiness to adopt AI for operational improvement.

### Assessment Areas
- Data infrastructure and quality
- Current technology stack
- Team capabilities and AI literacy
- Use case identification and prioritization
- Vendor landscape and build-vs-buy decisions
- ROI estimation for top use cases
- Implementation roadmap

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*Adapted from Anthropic Financial Services (Apache 2.0). No paid data subscriptions required.*
