Representative Engagements

Diligence → Value CreationHealthcare SaaS$45M ARR

A $5M price reduction at signing became $16M of value creation in year one

31%

cloud spend reduction in year one

$16M

value created at a 10x multiple

11.5% → 5.8%

cloud spend as share of revenue

Situation

A mid-market fund was evaluating a patient engagement platform as the anchor for a buy-and-build strategy. Reported cloud spend was $4.5M — 10% of revenue, high for healthcare SaaS but not disqualifying. The stack looked modern and SOC 2 and HIPAA compliance were both claimed. Nothing in initial screening justified walking away, and the deal proceeded to LOI at 11x EBITDA.

Approach

Six weeks of technical diligence found actual spend was $5.2M — management had excluded several accounts — putting it at 11.5% of revenue. Development environments ran at production scale around the clock ($800K), databases were provisioned at 4x observed utilization ($600K), and no cost allocation or tagging existed anywhere. Total identified optimization was $1.8M, about 35% of spend. HIPAA implementation had real gaps: incomplete encryption at rest, audit logging holes, undocumented access reviews. Scored against the Technology Risk Assessment framework, the findings totaled 10 points and supported a −0.5x multiple adjustment.

Outcome

The firm repriced from 11x to 10.5x — a $5M reduction — and negotiated a $3M escrow covering security remediation. The 100-day plan targeted $1.5M of first-year optimization. Shutting down development environments outside business hours captured $400K in the first 30 days; right-sizing the worst-provisioned databases added $300K. By month twelve, spend had fallen from $5.2M to $3.6M while revenue grew 38%, and cloud dropped from 11.5% of revenue to 5.8% — below the industry benchmark. The $1.6M of EBITDA improvement translated to roughly $16M of enterprise value at the company's exit multiple.

Pre-Deal AssessmentB2B SaaS$75M revenue

Strong growth and 95% net revenue retention masked a platform near end of life

$3.9M

remediation cost over 24 months

18 months

until the scalability ceiling

No deal

the firm walked away

Situation

On paper the target was excellent: 40% year-over-year growth, 95% net revenue retention, a defensible position, and discussions centered on 8x revenue. The investment thesis assumed the platform could carry that growth for the length of the hold period.

Approach

The core platform ran on a PHP framework that had reached end of life three years earlier. The original development team was gone, and the engineers who remained maintained the system through tribal knowledge and careful avoidance of change. There were no automated tests — each release took two weeks of manual testing. Fifteen years of unrefactored schema changes had produced tables with 200+ columns and queries measured in minutes. Modeling the compound interest on that debt was the core of the assessment: a framework migration that would have cost $200K five years earlier now required $2.5M and 18 months.

Outcome

The direct remediation cost was not what killed the deal. Engineers spent 60% of their time on workarounds, incident response, and manual testing — a 40-person team operating as though it were 16, roughly $3.6M in wasted annual labor, with feature velocity down 70% over three years. The platform could not scale past 50,000 concurrent users; the company was at 35,000 and adding 5,000 a quarter. Three remediation scenarios were modeled and all three failed within the hold period. The firm walked away. As the partner put it to the investment committee: the technical debt had consumed the value that made the deal attractive.

The most useful diligence outcome is sometimes a deal that does not happen.

Portfolio Optimization8 SaaS companies$12M combined spend

Portfolio scale captured discounts no single company could negotiate alone

$4.9M

annual savings across the portfolio

2.9 months

payback on commitment aggregation

15-20% → 35%

negotiated discount rate

Situation

A mid-market fund held eight SaaS companies with combined cloud spend of $12M, ranging from $800K to $2.5M each. Every company optimized independently, and each was individually too small to negotiate meaningful commitment discounts — the portfolio was leaving money on the table simply by acting as eight buyers instead of one.

Approach

A four-phase program over 18 months, with $1.2M invested. Phase one aggregated commitments: a centralized team analyzed usage across all eight companies and negotiated a single enterprise discount program. Phase two deployed shared monitoring, security, and CI/CD platforms serving every company. Phase three standardized the estate — five companies on AWS, two on Azure, one on GCP — onto a single platform with common tooling. Phase four established the operating rhythm: monthly infrastructure calls, quarterly architecture reviews, and a cross-company rotation program.

Outcome

Aggregation moved the discount rate from 15-20% independently to 35% collectively, worth $2.1M annually and paying back in under three months — which funded everything that followed. Shared services cut $1M of duplicated tooling spend to $400K. Standardization reduced the infrastructure engineering requirement from 24 people to 14. The clearest lesson was about sequencing: lead with commitment aggregation because it is fast and self-funding, and standardize gradually, because forced migrations create resistance where voluntary adoption with incentives does not.

Carve-Out SeparationCorporate divestiture$80M revenue

Eighteen months to separate a business unit fully entangled with its parent

18 months

to full operational independence

$2.4M

total separation cost

100% / 80% / 60%

shared auth / networking / databases

Situation

A PE firm acquired an $80M-revenue business unit from a Fortune 500 parent. The unit was not a standalone company in any operational sense: authentication ran entirely through the parent's tenant, four fifths of networking was shared, and customer data sat in a database cluster shared with the parent. The parent wanted out of the transition services agreement quickly; the buyer needed independent operations before it could do anything else.

Approach

Three months of pre-separation assessment mapped every shared dependency and scored the separation as high complexity — which set up the TSA negotiation. The agreement ran 18 months at $150K monthly with a 20% discount for early termination, aligning both sides on speed. Infrastructure replication followed over months three to nine: a dedicated identity tenant with 500 users migrated, replicated customer databases with independent backup and disaster recovery, independent networking, and dedicated monitoring. Data separation ran in parallel from month six, extracting 2M customer records from the shared cluster and migrating five years and 10TB of transaction history while the business kept operating.

Outcome

The unit reached full operational independence within the TSA window. The economics of a carve-out are dominated by two numbers that pull against each other — the cost of separation and the monthly cost of not having separated — and structuring the TSA with an early-termination discount put both parties on the same side of that tension. This is the shape of engagement where an interim CTO usually earns their keep: the work is a fixed-duration, full-time execution problem with a defined end state.

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Representative Engagements

A $5M price reduction at signing became $16M of value creation in year one

Situation

Approach

Outcome

Strong growth and 95% net revenue retention masked a platform near end of life

Situation

Approach

Outcome

Portfolio scale captured discounts no single company could negotiate alone

Situation

Approach

Outcome

Eighteen months to separate a business unit fully entangled with its parent

Situation

Approach

Outcome

The frameworks behind these

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