value

Small businesses are deceptively complicated. Intimate and chaotic. To a buyer, low hanging fruit is a siren song that distorts the risk reward calculation. Post transaction, more resources than planned are required to overcome the deeper challenges and transition the business to a new level. Scout Capital dives deep to deliver value, walking shoulder to shoulder along the risk|reward spectrum.

a catalyst

a bridge

Businesses in the lower middle market are deeply personal. To change is to upset. Transactions offer windows of opportunity that close prematurely.

When new norms are not established, a catalyst is needed to re-awaken the spirit of change, to rouse but not rile, excite but not spook.

Humbled, Scout understands listening informs more than talking. Thought leadership is nice but rarely inspires in the trenches. Scout spends time upfront, on its own nickel, to evaluate its ability to influence stakeholders and be a catalyst. No consultant speak (and no Power Point).

Deal fatigue sets in. A cycle of ultimatums, low responsiveness and deteriorating performance ensues. "Newco" and "Oldco" are terms that survive long past close.

Shared language and space matter in a partnership. A bridge is needed to connect the visions of past and future.

Small businesses talk in stories, while investors talk in numbers. Scout builds bridges by getting knee deep in relationships and data, stories and numbers. Melding operating and investment leadership experience, Scout nurtures a shared view of opportunities and risks and shepherds the execution of a mutual plan.

strategic coherence

a chameleon

There are common reasons small businesses get stuck in the mud. While professionalization and technology are often cited, something more foundational is usually the culprit.

Having alluring potential, small companies also have a legacy of stubborn heuristics and attitudes, saddled by a rigid organizational structure. Investors too may introduce deal anchors and other biases. What is needed is a little creative destruction.

After dismantling a disjointed architecture of myths and bad data, building strategic coherence can begin. Aligning vision, strategy and execution so the chain is understood and embraced is a big ask without multiple champions and a big dose of objectivity. Delivering strategic coherence is a cornerstone of Scout's engagements.

Small businesses have limited resources and lurking existential risk. Investors are time constrained. As surprises mount, opportunity costs grow, unmeasured.

What is needed is a chameleon on demand, an adaptive resource that adds value without risk. Leader. Wingman. Coach. Emergency responder. Hostage negotiator. Wait, what?

Scout offers an alternative to risky retainers and land-and-expand tactics. By emphasizing shared risk and reward in its engagements, Scout aligns itself to both owners and operators. Scout believes that riding the ups and downs alongside its partners is the surest path to enduring relationships that, along with luck, are drivers of real return.