PE READINESS · SERIES B · ARTICLE 08
What the 90-Day PE Readiness Program Actually Looks Like - and Why the Companies That Complete One Enter PE Conversations From a Fundamentally Different Position.
Governance preparation is not a single deliverable. Rather, it is a sequence of interventions, each building on the last, that together change the character of a PE conversation from one in which a buyer identifies risk to one in which they confirm quality.
The question I hear most often from founders preparing for PE is not about the pitch deck or the financial model. It is: where do I start? The honest answer is that most founders start in the wrong place. They start with the presentation, which is the last thing you build, not the first.
The right starting point is the governance baseline. A scored assessment of where the business currently stands against the standard a PE buyer will apply, across every dimension of governance that affects valuation. Without that baseline, preparation is undirected. With it, every subsequent hour is allocated against the specific gaps a buyer will find.
The founders who enter PE conversations best prepared are not those who worked hardest in the final months. Rather, they are those who started earlier, worked from a plan, and built something a buyer could read as a coherent governance record.
Stage One: Governance Baseline Assessment (Weeks 1 to 3)
The baseline assessment scores the business across six dimensions: board quality and decision process, ownership and related-party hygiene, financial infrastructure and reporting, regulatory compliance posture, data room readiness, and investment narrative strength.
Every finding is expressed in valuation terms. Not “governance is inadequate” but “this gap is likely to produce a 0.3x to 0.5x multiple reduction if left unaddressed.” The language of PE is the language of fund economics. The baseline assessment speaks that language from the first page.
This framing matters because it changes how management engages with the findings. A governance gap described as a compliance issue generates one level of urgency. The same gap described as a specific reduction in exit proceeds generates a different level entirely.
Stage Two: Remediation (Weeks 4 to 10)
Remediation is the core of the programme. The priority gaps identified in the baseline are addressed in sequence: board process rebuilt, RPTs documented, founder compensation benchmarked and evidenced, management accounts restructured, compliance baseline completed, and cap table cleaned.
The temptation at this stage is to move quickly and document later. Resist it. The documentation is not administrative overhead. It is the evidence that makes the remediation credible to a buyer. An undocumented improvement is, from a buyer’s perspective, an improvement that may not have happened. Date every action. Evidence every completion. The log you are building is an exit asset.
Stage Three: Preparation (Weeks 11 to 13)
The preparation stage assembles the data room, finalises the management accounts and board pack, and drafts the investment narrative. The narrative is tested against the likely diligence questions for the sector.
The data room is built to the organisational standard PE buyers expect: corporate structure, board minutes, contracts, IP, HR, compliance, and financials, indexed the way a buyer’s legal and financial teams navigate it.
A well-organised data room is a signal before the diligence conversation begins. It tells the buyer’s team that the management team understands what diligence looks for and has prepared accordingly. That signal changes the tone of the first diligence call.
Stage Four: The PE Readiness Report (Week 13)
The final deliverable is the PE Readiness Report: a scored assessment of the business’s governance quality against the PE buyer standard, with evidence for every claim.
This is not a document you show a PE buyer. Do not show it to a PE buyer. It is the evidence base that you and your advisers work from. It tells you, before you enter the process, exactly where you stand and what the remaining risks are. Going into a PE process without that knowledge is like going into a negotiation without knowing your own bottom line.
Who the PE Readiness Programme Is For
The primary audience is founder-owned businesses with revenues between twenty million and two hundred and fifty million dollars, preparing for a first PE investment in the next twelve to twenty-four months.
The secondary audience is management teams at PE-backed businesses approaching a secondary transaction or management buyout, where the governance infrastructure from the initial investment needs to be updated and evidenced for a new investor.
In both cases, the programme works for one reason that is worth stating plainly: Valmarga advises the funds that will be evaluating these businesses. The standard applied in the programme is not a generic governance framework derived from a textbook. It is the specific standard a GP’s governance counsel uses when they open the data room. That is the only standard that matters.
THE PRACTICAL TAKEAWAY
- Start with a governance baseline assessment. Without it, preparation is undirected. With it, every intervention is prioritised against what a buyer will actually find.
- Express every governance gap in valuation terms. That is the language that motivates action.
- Build the governance record during remediation – dated, evidenced, documented. The evidence is the point, not the action.
- A well-organised data room signals governance competence before diligence begins.
- The PE Readiness Report is not a document you show a buyer. It is the evidence base that makes everything you tell them credible.
START HERE
Not sure where to begin?
If you are eighteen months from an exit and have not stress-tested your governance posture, this is where to start.