Executive Summary
As private capital markets evolve, traditional valuation methods like EBITDA multiples no longer offer a complete picture of business potential. This white paper introduces Strategic Capacity as a core driver of transferable equity value. It shifts the valuation lens from historical performance to a forward-looking assessment of a company’s ability to deliver predictable profits, sustainable growth, and equity value—independent of its founder or CEO.
Core Concepts
1. Strategic Capacity
A business’s ability to consistently deliver on its intent—through leadership, systems, culture, and repeatable processes. It is:
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Observable
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Benchmarked
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Improvable
2. Strategic Intent
The long-term outcome the business exists to deliver (e.g., a liquidity event, growth mandate, leadership transition).
3. The Three Dimensions of Business Growth
These dimensions are key to diagnosing and building Strategic Capacity:
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Predictable Profits & Cash Flow
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Predictable Sustainable Growth
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Predictable Transferable Value
Applications in M&A and Private Capital Markets
M&A professionals, exit planners, and growth advisors can use the Strategic Capacity framework to:
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Evaluate acquisition targets beyond financial metrics.
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Reduce post-close execution risk.
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Defend and maximize valuation during due diligence.
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Guide owners through value acceleration and readiness planning.
