Michael Platner is an influential corporate strategist and business practices head at mega law firm Lewis Brisbois Bisgaard & Smith.
Business ownership is often defined by passion, grit and relentless dedication to an idea or vision. However, as a business matures, the mindset required to scale and ultimately achieve a liquidity event evolves.
From my time as a corporate strategist, managing partner at a law firm and helping business owners develop strategies for scaling and preparing for lucrative exits, I’ve seen what it takes to navigate this journey effectively. It’s essential for business owners to understand the distinct roles of the founder, operator and professional investor mentalities—and why thinking like an investor is pivotal for long-term success.
The Founder Mentality: Vision And Innovation
The founder mentality is the cornerstone of any entrepreneurial endeavor. Founders are visionaries, driven by a mission to solve a problem or create a product or service that stands out. This mindset thrives on creativity, risk-taking and an unwavering belief in the potential of their business.
While this mentality is vital in the early stages, it often leads to a culture centered on the founder’s desires rather than scaling the business as an enterprise. Founders can become too attached to their original vision, or the initial people who follow it, which can make it difficult to pivot or make decisions that prioritize financial sustainability over passion. For long-term growth and value creation, the founder must learn to delegate authority and develop a performance-oriented management team and culture.
The Operator Mentality: Execution And Efficiency
As a business grows, the operator mentality becomes critical. This mindset focuses on execution, operational efficiency and building scalable systems. Operators are the backbone of day-to-day business functions; they ensure processes run smoothly, teams are aligned and goals are met.
While the operator mentality is essential for stability and growth, it can lack the strategic foresight or experience required to navigate major transitions like mergers, acquisitions or public offerings. An overemphasis on operational details can sometimes overshadow the bigger picture, which is where the investor mentality comes into play.
The Pro Investor Mentality: Strategic And Objective
The investor mentality is the culmination of successful entrepreneurial growth. This mindset is strategic, data-driven and focused on maximizing value. Investors think in terms of risk and reward, scalability, liquidity and exit strategies. They assess businesses objectively, prioritize what will drive value and create enduring wealth for the owners.
Adopting this mentality doesn’t mean abandoning the vision or operational excellence that got your business to this point. Instead, it’s about integrating those strengths into a framework that prepares your business for an ultimate liquidity event, whether that’s selling the company, going public or securing significant investment.
Why Business Owners Need To Think Like Investors
For business owners aiming for a liquidity event, thinking like an investor is nonnegotiable. Here’s why:
1. Objectivity In Decision-Making: Founders and operators often make emotionally driven decisions. Investors, on the other hand, assess opportunities and risks with a clear, data-driven lens. This objectivity helps identify growth areas and cut underperforming ventures.
2. Focus On Scalability: Investors prioritize scalability—the ability to grow revenue exponentially while keeping costs proportional. Business owners with an investor mindset can build systems, teams and products that can scale effectively.
3. Preparation For Due Diligence: Investors (and private company markets) evaluate businesses based on financial health, market position and growth potential. By thinking like an investor, business owners can ensure that their financials, operations and market strategies are aligned with what potential buyers or investors are looking for and that the business is “marketable.” This is also referred to as a liquidity-readiness mindset.
4. Exit Strategy Alignment: A liquidity event is the ultimate goal for many business owners. An investor mentality helps ensure every decision—from product development to market expansion—is aligned with the endgame of maximizing valuation and securing a successful exit.
5. Risk Mitigation: Investors are skilled at identifying and mitigating risks. By adopting this mindset, business owners can proactively address vulnerabilities, making their businesses more resilient and attractive to potential acquirers.
Bridging The Gap: Cultivating The Investor Mindset
Transitioning from a founder or operator mindset to an investor mindset requires deliberate effort. Here are steps to help bridge the gap:
Seek mentorship. Learn from seasoned investors or executives who have successfully navigated liquidity events. Their insights can provide valuable guidance.
Build a strong advisory board. Surround yourself with advisors who can offer strategic, financial and operational perspectives. A diverse board can help you balance your founder passion, operator efficiency and investor objectivity. Great management and a succession plan are also critical in building a team approach to achieving optimal results.
Focus on financial literacy. Understanding financial metrics and valuation drivers is crucial. Regularly review key performance indicators, and ensure your financial reporting is transparent and robust.
Embrace strategic planning. Develop a clear roadmap for scaling your business and making its value unassailable. This includes identifying potential acquisitions as well as buyers or investors and becoming aware of how the market values your business.
Think long-term. While day-to-day operations are important, always keep an eye on the big picture. Every decision should be evaluated in terms of its impact on your business’s long-term value. Foster a culture that cares about this.
The Ultimate Payoff
By integrating the founder’s passion, the operator’s execution and the investor’s strategic foresight and experience in owning and managing a portfolio of private businesses, business owners can create a well-rounded approach that drives growth and maximizes value. Thinking like an investor doesn’t just prepare you for a liquidity event; it transforms your business into an asset that others see as worth investing in.
In the end, adopting the investor mentality is about ensuring your years of hard work, innovation and dedication culminate in a payoff that reflects the true value of your business. This mindset is the key to unlocking your business’s full potential and creating real wealth from a valuable marketable business.
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