Run the Numbers

Do PE Companies Trade Innovation for Margins?


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Do PE Companies Trade Innovation for Margins?

Private equity firms love to talk about operational excellence… but when “efficiency” comes at the cost of innovation, are they mortgaging tomorrow for today’s margins?

In this episode I break down why 25% operating margins became the magic number in software, how PE-backed businesses chase the Rule of 50, and what happens when cutting R&D tips companies into the “Innovation Death Spiral.”

Today’s podcast is brought to you by Campfire.

You may know that we use Campfire as our ERP, and it’s been a game changer for our finance workflow. The interface is intuitive, migration was quick and painless, and it's freed us up to focus on strategic work instead of manual processes. In case you don't know, Campfire is an AI-first ERP powering next-gen finance & accounting teams. Helps you close fast, unlock insights and scale smarter.

If you’re curious about where finance tech is heading, and would like to hear more of my thoughts on the topic, don’t miss Campfire's Finance Forward AI Summit - the upcoming summit bringing together the sharpest minds in finance and operations.

You’ll hear directly from industry leaders on how they’re using AI to shape the future of finance, and how your team can get ahead of the curve. I'll be speaking on panels with finance leaders from Anthropic, Snowflake, Mercury and more. The summit is October 28th in San Francisco; I hope to see you there.

Sign up for the summit at campfiresummit.ai or learn more about Campfire at www.campfire.ai.



This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit cjgustafson.substack.com
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Run the NumbersBy CJ Gustafson

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