Reading Between the Lines

Whitepaper

Built for private equity investors, boards, and portfolio company leaders

Operational value creation has become the defining driver of returns.

In Reading Between the Lines, we explore how the Rule of 40 can be used as a practical governance framework for balancing growth and profitability, helping leaders assess whether value is being created throughout the holding period.

Download the whitepaper

Use the form below to download a free copy

Private equity is entering a more demanding phase

Leverage is more expensive, exit multiples are less predictable, and holding periods are getting longer. As a result, operational execution has become the primary driver of value creation.

This whitepaper explores how the Rule of 40 can be used as a practical governance framework to assess whether a portfolio company is creating value by balancing two fundamental levers:

→ Revenue growth

→ EBITDA margin

Rather than treating growth and profitability as separate metrics, the framework helps boards, investors, and management teams understand how that balance evolves throughout the holding period.

Rule of 40

Inside you'll learn

This whitepaper explores how operational value creation is becoming the defining source of returns in private equity and introduces a practical framework for tracking commercial performance over time.

Inside you’ll learn:

Why operational execution has become the primary value driver
How the Rule of 40 can be applied beyond SaaS
Why tracking the trajectory matters more than the headline score
Five performance archetypes that help guide board-level decisions
Practical implications for private equity funds and portfolio company leadership

Hear it from the author

Private equity has changed. Today, creating value depends less on financial engineering and more on how effectively portfolio companies improve commercially and operationally over time. In this paper, we introduce the Rule of 40 as a practical governance framework that helps boards and investors make those improvements visible and easier to manage throughout the holding period.

Sixten Schultz

Co-Author, Senior Partner

Meet the authors

Sixten Schultz

Partner

Sixten leads Kvadrant Consulting’s Strategy & Transactions practice, advising corporate clients and private equity investors on company strategy, commercial due diligence, value creation, and exit optimization.

Peter Gulstad Heslop

Management Consultant

Peter advises private equity funds and corporate clients on commercial due diligence, value creation, and strategy. He combines analytical rigor with hands-on commercial experience to help businesses unlock growth throughout the investment lifecycle.

Søren Hummelgaard

Management Consultant

Søren works with private equity funds and corporate clients on commercial due diligence, strategy, and value creation. His focus is helping organisations turn commercial insights into practical execution and long-term performance.

Reading Between the Lines

Use the form below to download a free copy

Private equity is entering a more demanding phase

Inside you'll learn

Hear it from the author

Meet the authors

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