How PE can use the “See, Solve, Scale” entrepreneurial process to screen investments

NextWave Private Equity

Danny Warshay, Executive Director of the Nelson Center for Entrepreneurship at Brown University, explores how the “See, Solve, Scale” entrepreneurial process can help PE investors screen potential investments.

Partnering with a private equity (PE) firm has become especially attractive for founders of lower and middle market companies that aim for transformational, sustainable growth. As active and engaged investors, PE brings not only capital, but specialized industry expertise and experience, and generally a large network of professionals and operating resources. But to which entrepreneurs and founders is private capital flowing and what factors are influencing those investment decisions?

Danny Warshay is the Executive Director of the Nelson Center for Entrepreneurship at Brown University in Providence, Rhode Island, and author of “See, Solve, Scale: How Anyone Can Turn an Unsolved Problem into a Breakthrough Success.” Danny asserts that much of the same “See, Solve, Scale” process that has empowered so many entrepreneurs can also be helpful to investors as a screen for potential investments. The episode also explores how the legacy culture, bias and ways of doing business in PE can shape investment decisions and cause investors to overlook promising opportunities and entrepreneurs.

Entrepreneurs should keep three things in mind when seeking to raise private capital:

1. Seek to fix problems that actually exist rather than be “a solution in search of a problem.”
2. Having abundant resources can burden the entrepreneurial process, while scarce resources can actually be beneficial.
3. Aspire for diversity among founders, management teams and investment teams because diverse teams are better positioned for success.