We share executive moves, placement insights, and Software and SaaS PE leadership trends weekly — feel free to follow us on LinkedIn here:
Most conversations about value creation in PE-backed software stay abstract. Frameworks get named, principles get cited, and very little of practical use gets said. My conversation with Patrick Dennis on Tailored Talent was not that conversation.
Patrick is a multi-exit software CEO currently leading Avaya. He has operated across the full range of PE scenarios and has a specific, battle-tested way of thinking about every stage of the work.
We covered enough ground that we published this episode in two parts, because each half of the conversation deserved its own treatment.
PART ONE
The CEO's Private Equity Playbook
The first thing Patrick asks a sponsor for is the deal model.
Not the value creation plan. The actual financial structure that underwrites the thesis the sponsor used to justify the acquisition. His position is that it is true north, and if a sponsor is not willing to share it, he is not interested in taking the seat.
Everything that follows, how to outperform, where to push, what to renegotiate, starts with knowing where that is. From there, he looks at the three or four points that underwrite the deal thesis and does his own outside-in research to pressure-test whether they are rational. Some will be on the right track but not yet executed. Others may need to be redefined. The earlier you surface those gaps and work through them with the sponsor, the less damage they do later in the hold. If you get surprised a year in, that is not bad luck. It is a failure of preparation.
Start with the Deal Model, Not the Value Creation Plan.
Three Dimensions of Push and Pull Before You Sign
Before committing to a role, Patrick tests the relationship across three dimensions. Financial, operational, and governance.
- On the financial side, sponsors will have their strongest convictions and probably their most credible point of view. The CEO should do more listening than pushing there.
- On the operational side, the CEO should be the expert and hold that ground clearly.
- The governance dimension is the one that gets underweighted most often. Who has final authority on executive hires? How does the annual operating plan get set? Those boundary conditions need to be established before the company is running, not figured out mid-hold when something goes wrong.
Board Formation: Smaller, Smarter, Matched to the Plan
Patrick's view on boards cuts against a trend I observe regularly. Large boards are slow. Eight, nine, ten person boards optimize for representation, not for speed. In private equity-backed software, where speed is a genuine competitive variable, that is a trade-off worth resisting. The board structure is often set in the shareholder agreement and cannot be negotiated. The people can always be.
First Filter:
Find a director who can backstop the highest-impact, highest-complexity element of the value creation plan. At a hypergrowth cybersecurity company, that meant a director with deep operator experience in cyber who understood the chief security officer buyer. At Avaya, the financial complexity required a director with a strong CFO background who chairs the audit committee.
Second Filter:
If the CEO has a genuine flat spot, find a director with those competencies, not to work around the CEO, but to make them more effective leading the person in that function.
PART TWO
Talent and Value Creation
Hire to the Season, Not the Destination
Patrick's approach to building an executive team is explicitly situational. His view is that the season the company is in should drive the profile, not the eventual destination. Early in a hold, the mandate is often a specific body of work. The executive who can execute that phase at speed may not be the right person once the company shifts into run mode.
He calls it the special forces model. A highly capable unit assembled for a specific mission, with the understanding that the team may look very different by the time that mission is complete and the next transaction is on the horizon.
The CRO Question: Think Carefully Before You Swap
The CRO is the most impactful search in a PE-backed software company. It is also the role where the instinct to swap can be most damaging. When you change a CRO, you do not just change the CRO. You trigger a cascade through the next layer and then the layer beneath that.
By the time you have fielded the full go-to-market team under a new leader, a year can pass. A year is 20 to 25 percent of a five-year hold.
That forces one of two outcomes:
- Pull down return expectations, which is the most expensive decision available, or
- engineer unnaturally aggressive back-end growth to recover ground.
Physics may not allow the second.
His alternative is to build the revenue operations function first. Rev ops should sit between sales and finance, reporting neutrally, serving as the actual source of truth. Without that infrastructure, you are relying on the CRO's own instruments to evaluate whether the CRO is performing. What he wants from that role is not the biggest number. It is forecast accuracy, consistency, and transparency. That discipline is what acquirers pay for at exit.
Why the CFO Search Is the Hardest
Patrick closed with something I appreciate for its candor. The CFO is the hardest search in PE-backed software, and the reason is structural. The sharpest finance minds in the room are often on the sponsor side. They are the people who bought the company. The internal CFO they now interface with made a different career decision. That creates a built-in tension of expectation that the CEO has to actively manage. His advice is not to fight it. Find a CFO who can genuinely work with the sponsor. If that friction is not resolved in the hire, it will consume the CEO's time and attention for the duration of the hold.
What Holds Up When Everything Is on the Line
Patrick Dennis has been a multi-exit software CEO. The perspective he brings to these decisions is not theoretical. The deal model as true north. The three-way push and pull test before you commit. Hiring to the season. Building rev ops before you judge the CRO. Finding a CFO who can work with the sponsor, not just impress you in an interview.
These are the frameworks that get tested when everything is on the line. They are worth understanding before you are in the room making those decisions.
Watch Part 1:
Most CEOs stepping into a PE-backed role for the first time underestimate how much of the job is about alignment before the work begins. The deal model, the sponsor relationship, the board you build around yourself. Getting that right before the company is running is what separates a smooth hold from one that becomes a constant negotiation.
Watch Part 2:
The most consequential decisions in a PE hold are not the ones made in the boardroom. They are the ones made about people. Which executives to bring in, when to make changes, how to build the right measurement infrastructure before you hire the revenue leader, and why the CFO search is structurally harder than most people will admit.
Authored by:
Share this article: