Hi {{first_name}},

The growth equity deals I've made over the years have a common thread. I look for a genuinely sharp team, an industry with wind at its back, and no exact precedent for the specific product or thing they were building.

To start with, there is the $70 million manufacturing facility we built in Dallas. It's the first, third-generation version of its kind. This type of build was new to the team. Their equipment partner had built 99 facilities before, just not exactly like this one. Or another example, Codesmith. Here I was the first investor and backing a founder with real experience in something adjacent, but again not this exact thing. Or most recently, the 007 video game, a studio taking on a license that size for the first time. Three different industries. But with the same pattern every time. Real experience aimed at something they hadn’t done exactly this way before.

If you wait for an entrepreneur with an exact history of the exact thing they're about to do, you'll wait until every good deal is gone. That absence is what forced me to build something I now call The Growth Predictor framework. The value proposition nobody else offers. A team on the short list of people who could actually execute it. Real momentum in a market they know well. And something locked in behind them — secured IP, a committed partner, revenue on the books — so the door can't swing open again once they're through.

Success in entrepreneurship is found in the confidence to execute, knowing you won’t have all the information, and that nothing will actually end up going to plan. Every founder I back walks in believing nothing can stop them.

Sure, that’s great energy. But often, Mike Tyson's most quotable line catches up with them. ‘Everyone has a plan until they get punched in the mouth.’ 

And none of those three deals had an exact precedent. No manager who'd done that specific thing before. So I weighed the other signals including the partners, the momentum, the edge.

Growth equity deals like those never had a matching track record, because if you wait for that, the opportunity is already gone. Buyout funds looked like the exception: real history, a decade of results, same team. 

A few weeks ago we revealed why that history doesn't hold up. The results looked finished, but the successor fund was already being raised before the predecessor's own investments had wrapped up.

This week I found out exactly why. And built four questions to ask while calculating that risk.

— Walker Deibel
WSJ & USA Today Bestselling Author of Buy Then Build
Founder, Build Wealth

You're underwriting a number before it’s done. So is everyone else.

Every allocator believes the same thing. A manager who crushed it last time will crush it again. And the record seems to back them up. Buyout managers whose last fund finished in the top quartile went on to return their investors 1.27x their money in the next fund (PME measures capital returned against a benchmark). Managers whose last fund finished at the bottom returned just 0.96x, a loss once you count inflation. This is what everyone thinks they're buying when they chase a great track record.

Now run the comparison again using only what an investor could see at the time. 

That means the interim performance a fund was posting while it raised its next one. The gap from before collapses. Successor PME lands at 1.17x, 1.16x, 1.13x, and 1.18x across the four quartiles. The manager who looked like the best in the market and the manager who looked like the worst produced results within five cents of each other. Some managers with a top-quartile interim record finished dead last. Some with a bottom-quartile interim record finished on top. At the moment the capital had to move, the ranking told you almost nothing about what came next.

Final performance spreads by 0.31x between best and worst. At fundraising, that spread is 0.05x.

The skill is real. The problem is that a track record only becomes readable after the moment an investor has to use it.

Private markets make this mismatch almost impossible to escape. 

So the next fund goes out to raise money before the last one's investments have finished paying off. The number an investor underwrites is a half-finished track record.

Every allocation decision has two clocks running at once. The fundraising clock resets at that 4.7 years whether the evidence is ready or not. The realization clock takes 6.6+ years to produce a number you can trust. The fundraising clock always wins the race. That's just how long a private investment takes to prove itself out, and no one is going to arbitrage it away.

The way the market is behaving right now only sharpens the problem. Investors are pouring capital into fewer, larger, brand-name managers. Total private capital fund count fell 45% year over year heading into 2026, while the biggest, most recognized firms kept closing funds on schedule. That rush runs on the same instinct as every track-record chase. Bet on the name that already proved itself. 

A second problem stacks on top of this. 

The number of active fund managers grew from about 3,700 in 2007 to 13,000 by 2022. Over the same stretch, buyout's share of that crowd fell from 75% to 55%. More managers running more strategies means more logos waving a track record that may not carry over to what they're raising next. Every one of them is asking you to judge the same unfinished evidence on the same rushed clock.

Waiting for the numbers to mature doesn't fix it either. By the time a manager has three fully realized funds behind them, they've usually raised more capital, changed their terms, or moved into deals that look nothing like the ones that built the record you're leaning on. The clean number shows up only after it's stopped being useful.

So what carries the weight instead? Attribution. One aggregate number can't hold a decision together, so break it apart. Which decisions produced the number, which people sourced them, and does the edge behind those wins still apply to the fund being raised today?

The number lies because it's measured too early. This week's report shows exactly how early — the full data behind the manager pileup and the fundraising-clock mismatch.

Read the full report.

Since the number won’t tell you the truth, these four questions will.

The instinct is to ask a manager for their fund's IRR, line every option up, and rank them. The Shift Your Stack section showed why that instinct fails at the exact moment you need it to work.

Run every deal through The Growth Predictor framework. Offer, demand, money, team, and momentum. Team has always been the element that was simple to check off. You confirm the track record is strong, then move on. But that single number can't carry the job anymore. A strong number on a manager's last fund doesn't tell you what you think it does.

Don't count on a clean pass-or-fail answer to these questions. What they will tell you is how much the record can be trusted, and how much weight the other answers have to carry.

A quoted IRR blends two very different things. Some of it is realized — cash actually paid back to investors. The rest is unrealized — a value someone assigned to a deal still sitting on the books. They carry different weights.

A fund's returns come from individual decisions made by individual people. The logo on the fund documents didn't source the deals — a person did.

A strong buyout record proves a firm has judgment and can attract talent. It doesn't prove the same team can underwrite private credit, run infrastructure, or handle a fund three times the size.

Every record was earned in a specific market — a certain cost of capital, a certain level of competition for deals, a certain entry-price environment.

Now for calculating a score.

It’s ok if a manager can't fully answer question one on a still very young fund. You don’t need to disqualify them. An emerging manager with no realized track record can still be a strong bet if questions two and three come back with real attribution, a transferable edge, and you can verify the people. No single answer settles it. What moves is your conviction, and how much you're leaning on the other questions to cover what the missing evidence can't.

A manager who answers all four with specifics is rare, and worth paying up for. A manager who dodges all four and just points back at the headline IRR is asking you to trust the one number that told you nothing about the four managers who used to look just as good.

"Life can only be understood backwards, but it must be lived forwards."
— Søren Kierkegaard

Every fund document arrives with its ending already written. The investment you're about to make hasn't been. Someone else finished that story before handing it to you. 

Yours is still being written, which is what makes the risk calculated instead of blind.

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This is not financial advice. Illustrative output of a reasoned thought experiment. Not a backtest, guarantee, or prospectus. Actual results vary based on market conditions, fund selection, timing, fees, taxes, and factors not modeled. Private credit, CRE, and leveraged strategies involve significant risk including loss of principal. Consult a qualified financial advisor.