Are You Private Equity Ready
July 23rd 2026 | Posted by Stuart Clark
David Rolfe, partner at NVM Private Equity, opened FD Recruit’s latest boardroom session with a single, direct question. What actually makes a business private equity ready? Rolfe has spent 14 years on the investment side at NVM after 15 years qualifying and working at PwC and he grounded his answer in the numbers behind that question.
NVM receives around 200 opportunities a year, looks seriously at perhaps 100, meets 50, makes offers on 20 and completes on two or three. Everything that followed was really an explanation of why that funnel narrows so quickly.
“Whilst we take a forensic look at certain things, any buyer, whether trade or private equity, is looking for very similar things. It’s almost an exit readiness process with a private equity slant.”
What Private Equity Ready Actually Means
Rolfe was careful to point out this isn’t only for founders actively courting a private equity deal. The same scrutiny applies to any exit, trade sale included, which is why he framed the whole session around readiness rather than fundraising. The starting point is always the numbers. Investors want a clean, reconcilable set of figures and a clear bridge between statutory accounts and management accounts.
Add backs are fine, he said, as long as they are credible. One off costs are acceptable, hypothetical revenue from staff you never hired is not. From there the focus moves to revenue quality, such as how much is recurring, how much is contracted and at what point in the year that contracted position becomes visible.
The Financial Checklist Behind a Private Equity Deal
Rolfe kept coming back to a handful of pillars that decide whether a business gets taken seriously. He set them out roughly like this:
- Quality of earnings: A defensible bridge from statutory numbers to adjusted EBITDA, with add backs that would survive a sceptical question.
- Systems and reporting: Monthly management accounts, a working KPI framework and board discipline, not just an annual scramble.
- Cash and forecasting: Rolling cash flow, ideally on a 13-week view, plus a clear read on working capital needs.
- The business plan: A credible equity story built on genuine historic growth, not a hockey stick with no explanation behind it.
- Commercial risk: Margin, customer concentration and churn, all backed by data rather than reassurance.
“The biggest issue we have is when an owner comes to us with high levels of ownership and says, right, I want to sell my business. We quickly ask who is going to run it. Hanging around for six months doesn’t really work for us.”
People, Succession and the Human Side of the Deal
Why Private Equity Deals Fall Over on Management
Of everything Rolfe covered, succession was the one he called the number one reason deals do not get done. Owner managers often leave it until last, understandably, given the business is usually their biggest asset. NVM needs a management team already in place and aligned with the buyout, not an owner planning to hang around briefly after completion. A good non-exec helps, he said, but it is not a substitute for a proper transition plan and NVM has kept founders on for a year or more where they still add genuine value.
Recurring Revenue and Deal Multiples
When asked about services revenue against ARR, Rolfe was direct, advising that product revenue carries the lowest multiples because it is the least predictable, service revenue sits in the middle and SaaS commands a premium because subscription income is sticky and hard to switch off. Facilities management businesses with heavily contracted service revenue, he noted, can still attract strong multiples even without a SaaS label attached.
On the wider Q&A, Rolfe touched on non-execs as collaborative appointments rather than succession fixes, pre-revenue startups sitting firmly in venture capital territory rather than private equity, AI reshaping due diligence workloads faster than advisers can adjust their fee models and secondary buyouts moving faster because the governance is usually already in place from the first PE owner.
In Summary
For CFOs and FDs weighing up an exit, Rolfe’s message was consistent throughout:
“Private equity readiness is not one big project, it is the accumulation of clean numbers, honest forecasting and a management team that can stand on its own, built up long before a buyer ever appears.”
