Why Your VP of Sales is the Hidden Driver of Enterprise Value
By Sam Torres, Managing Director — Sam Torres specializes in placing senior executives across the sports industry, including CEOs, COOs, CFOs, CIOs, CMOs, CTOs, and Vice Presidents. With a deep understanding of team operations, fan engagement, and sports business strategy, Sam offers critical perspectives that are routinely featured in Forbes, Entrepreneur, Business Insider, and other major publications.
All private equity executives know that the most important aspect of any PE-backed venture is value creation.
While every member of the C-suite plays a vital role in actively improving portfolio companies, there is one role that is particularly critical to achieving higher returns: the VP of Sales.
A portfolio company’s VP of Sales takes on the bulk of the responsibility for turning leadership’s investment thesis into real value by building a scalable revenue engine, optimizing operational efficiency, and transforming how the market values the entire organization. These facets combined contribute to why the VP of Sales’ impact on enterprise value cannot be overstated.
When boards and investors select the right person for the job, the path to value creation is clear and smooth. Unfortunately, a mistake in choice often means a long, slow, expensive slide in the wrong direction.
The True Value of Strong Sales Leadership and Company Valuation
Along with enhancing earnings credibility, quality of growth, and investor confidence, the VP of Sales role in growth companies enables strategic decision-making that can significantly impact exit timing. They’re often able to improve forecast accuracy and due diligence efficiency, allowing for greater agility in pursuing opportunities.
Why obsess over VP of Sales metrics and position? The answer is simple: depending on the company and sector, the choice of who to place in the position could make millions—even billions—of dollars’ worth of difference.
4 Benefits of an Effective VP of Sales Search
When it comes to private equity ventures, the VP of Sales search shouldn’t be all about having a resume stacked with experience. Instead, it’s about finding the person with the right background and skills to do well in a particular situation. When a VP of Sales is correctly matched to the company, everyone benefits in multiple ways.
1. Better Earnings Quality
A well-suited VP of Sales knows how to tie earnings forecasts to strategic growth drivers, showing stakeholders a clean path to value.
With earnings quality issues no longer a hindrance, buyers can feel more confident, which ultimately commands a higher exit price.
2. Better, Faster Exits
Good VPs of Sales accelerate the timeline between acquisition and the sale. Their forecasting abilities mean more plentiful exit options as well as a clean break when it’s time to let go.
3. ROIC & Margin Lift
Good VPs of Sales can use value-based selling and efficient customer acquisition strategies to better manage (and bring down) capital expenditure. Ultimately, this raises the return on investment and expands profit margins.
4. Credibility with Lenders & the Board
A high-value VP of Sales raises the confidence of all stakeholders with consistent performance and clear, strategic choices. Everything they do is backed by facts and evidence rather than “hunches” and feelings.
Why Most VP of Sales Selection Processes Need a Shift
Many companies are challenged to find a transformational leader to capable of building next-level value creation. That’s often due to the following factors.
Situation Diagnosis
If you’re still relying on the VP of Sales’s resume, this is often the wrong approach. Instead, you should be looking to match the candidate with the context.
Your VP of Sales should be able to demonstrate that they have the right systems, understanding of unit economics, and customer acquisition strategy to get the job done (and on time).
Misaligned Archetypes
Not all VPs of Sales are the same. It’s important to understand the current stage of the portfolio company and whether your VP of Sales’s skills and traits are suitable for it. Otherwise, you may be in for a messy transformation.
Some VP of Sales archetypes to consider include:
- Builders: Best for projects that are early in the infrastructure building stage or are in the throes of initial market penetration.
- Scalers: Best for building streamlined sales operations or transforming sales planning and analysis for rapid growth.
- Integrators: Best for buy-and-build projects and those that need sales systems consolidation or operating model redesign.
- Market Athletes: Best for companies that need to aggressively penetrate new markets or are looking to improve IPO or sell-side readiness.
Considering these archetypes can help you ensure you choose the right person for the job.
Undervaluing Change Leadership: If you’re looking for sales transformation for integration work, it’s important to hire someone who has experience. Look for a VP of Sales who has an excellent track record with change management.
How Cowen Partners Can Help You Find Your Perfect VP of Sales
At Cowen Partners Executive Search, our approach is to focus on outcomes. We start by mapping out the enterprise value drivers and incorporating that into our VP of Sales search. In our first working session, we work to understand sales capital structure, systems, pricing, working capital, the M&A pipeline, and your timeline. We then match VPs of Sales to the current needs and reality of the company. It’s in this process that we find the direct connection between sales leadership and EBITDA growth.
We then lean into evidence-based assessment for all candidates. This means conducting structured interviews with your value levers in mind. We don’t wait for you to hire a VP of Sales to understand their plan.
Instead, we align our selection process with a 90-day plan tied to the investment thesis so your VP of Sales can hit the ground running on day one. Some of our goals in making the right selection include:
- Plus or minus five percent in forecast accuracy.
- Ten to twenty percent cash conversion improvement.
- Improving ROIC by fifty to one hundred basis points.
- Clean audits that need minimal adjustment.
- A complete restoration of lender confidence.
Our team puts in the work to ensure that your VP of Sales is well-matched and ready for impact.
Hiring the Right VP of Sales Is the Key to Value Creation
When it comes to private equity, value creation and credibility are the most critical factors. When you don’t put the right person in the VP of Sales seat, these two goals become nearly impossible to achieve. To find your perfect VP of Sales, you must consider not only the resume but also the context. The best VP of Sales in the right situation can ensure a company maximizes value for the best possible return on investment.
Cowen Partners Executive Search in All 50 States
At Cowen Partners Executive Search, we help organizations identify and develop leaders who can operate at the intersection of human capital and enterprise architecture, building leadership pipelines that anticipate tomorrow’s complexity while delivering results today.
Whether you’re evolving your CHRO into a broader CAO role, rethinking your organizational design, or aligning leadership with long-term strategy, our proven approach ensures your company is ready for what’s next.
Contact us today to discover how Cowen Partners Executive Search can help your organization define the role it truly needs and find the right leader to fill it.
Schedule a Call.
Fill out the email request form to learn more about our approach.