How to Build Private Equity Deal Structures 50% Faster.

The importance of the private equity deal structure 

Deal structuring in private equity is one of the most analytical, collaborative, and important pieces of the deal process. It sits at the intersection of diligence, financing, and negotiation. Getting it right doesn’t just mean winning the room – it’s also about managing risk and aligning incentives for a laundry list of stakeholders: the investment committee, the deal team, the seller, lenders, legal advisors, financial advisors, limited partners, and more. 

While daunting, it’s all in the name of securing a deal that builds true value without missing tax or regulatory considerations that often slip through the cracks and impact the sale. A good deal structure determines the price and sets the terms of the investment. A great private equity deal structure tells a story of how that price is paid, who carries the risk, and how everyone benefits if the deal proceeds. 

The typical PE deal structure process 

Deal structure creation for private equity firms tend to follow a similar, tedious process. 

Deal team members, typically associates, start creating ownership charts and translating the deal terms into a visual structure for the investment committee. More senior deal team members, typically VPs or principals, then negotiate terms with sellers and lenders, determine how the deal should be financed, and liaison with the associates to update the diagram as they make decisions. 

Senior leadership, Partners and Managing Directors, typically step in to give their edits, negotiate more major terms, and then approve and present the structure to the investment committee. By now the structure has passed through multiple parties, waited on numerous approval layers, and generated so many drafts it’s hard to keep up – and that’s just internally. 

External contributors like lawyers and financial advisors also play a major role in ensuring the structure meets tax and regulatory compliance, drafting the agreements, and formalizing the legal structure of the deal. A typical private equity deal structure might go through 20+ iterations before it’s considered done. 

Building the structure visually 

Building a diagram for the deal agreement isn’t much easier or faster than the back-and-forth of creating the structure in the first place. Many firms still rely on manual tools such as spreadsheets, decks, or even paper drawings to visualize the structures they worked so hard to design. This contributes heavily to the time and effort spent on the deal structuring stage of a purchase agreement.

Despite the time it takes, the importance isn’t lost on anyone – these visuals are key to aligning stakeholders and diagramming the details of complex deal agreements. Diligent firms prefer to model each proposal and see it laid out in front of them, but testing multiple scenarios means more managing-up for approvals, more spreadsheets of data to parse through, and more time building and mapping.

The pressure for these private equity firms to turn deal structures around quickly is high. Beating competition and winning the deal hinges on being the first and best to table. And yet, the deal structuring process has remained the same for decades. Firms feel confident this tedious, manual process is as good as it can get.

How could firms possibly move faster without compromising quality?

How to build faster and still win the room 

Firms are still using 2D tools – spreadsheets, decks, emails – to solve complex, 4D problems. 

The strongest private equity deal structures are built on intelligence and integrity. That means integrating directly with the data sources to keep the structure accountable and error-free. They tell a story not only by laying out all of the information visually, but by surfacing key areas of consideration. Risk becomes pronounced, stakeholder considerations are clear, and the team feels aligned on a shared message. 

Not only are these deal structures stronger – they’re faster, too. When data is integrated directly, there’s no need for unnecessary back-and-forth. When structure scenarios are more easily modeled, there’s no need to wonder if the next iteration feels worth the manual time and effort needed to build it. When stakeholders work within a shared visual, there’s no need to double check which draft you’re on or whose turn it is to review.

How do private equity firms do it?

Introducing StructureFlow

StructureFlow is the live, data-driven visual workspace built for private equity teams operating at speed, scale, and risk. With StructureFlow, teams can create structure visuals at least 50% faster by eliminating bottlenecks, removing the need for human-made diagrams, and unifying stakeholders in one shared collaborative environment. 

With StructureFlow, PE teams can easily:

• Map
  • See the full ownership and control system.
  • Build fund structures, SPVs, portfolio companies, and governance layers in one connected model. 
• Model
  • Conduct due diligence, test and explore before capital is locked in. 
  • Navigate the downstream impact of structural, legal, or financing changes before they’re executed. 
• Move
  • Align investment committees, LPs, and advisors. 
  • Collaborate in a unified model to instill confidence in stakeholders and protect from post-close surprises. 

StructureFlow saves teams time and productivity without compromising integrity. The spreadsheets and decks you use and love remain for their purposes – but their purpose isn’t deal structuring. Decks are for presenting. Spreadsheets are for data. StructureFlow is for mastering complex structures.  

Learn more about StructureFlow for private equity deal structuring

To learn more about how StructureFlow can help your private equity team build deal structures, surface risk, and align stakeholders in a shared environment without compromising integrity, book a demo today.