In a recent LinkedIn post, Lee McCabe challenges the often-sanitized narratives surrounding revenue generation within private equity-backed businesses. McCabe, a partner at Claymore, argues that the “board story on revenue is usually fiction with formatting,” highlighting a critical disconnect between high-level reporting and the granular reality of where income truly originates.
McCabe frames the core of his analysis around a fundamental question posed to the businesses Claymore partners with: “Where does revenue actually come from?” He stresses that this inquiry goes beyond the superficial metrics often presented in board decks, seeking the “real version” that delves into specific customer groups, product performance, individual salespeople, geographic locations, and even “random pockets of demand” that may be sustaining the business without full understanding.
“The board thinks growth is coming from the strategic initiatives. The new channel. The cross sell programme. The digital investment. The sales transformation. The market expansion story everyone has been polishing for six months.”
The Glamour Gap in Revenue Streams
According to McCabe, the actual drivers of revenue are frequently far less glamorous than the strategic initiatives highlighted in board presentations. He points to the potential for revenue to be sustained by overlooked assets such as legacy products, a small group of high-performing sales representatives, or a single, undervalued referral source. McCabe also notes the common tendency to rely on relationships that are not yet truly institutionalized, or to capitalize on niche markets that were stumbled upon rather than strategically developed.
This discrepancy, McCabe argues, has significant implications. “Because if you do not know what is really driving revenue, you cannot underwrite growth properly. You cannot allocate investment properly. You cannot fix the weak spots. And you definitely cannot sit in a board meeting talking confidently about value creation.”
Beyond Summary Views: The Peril of Superficial Data
McCabe contends that many PE-backed businesses operate at a “summary level,” relying on broad categories like revenue by region or channel. While acknowledging these views have their place, he warns that “summary views are where truth goes to die.” He asserts that genuine insight is typically found “one or two layers lower, where the story gets more uncomfortable.” This deeper dive is crucial for effective management and strategic decision-making.
“Real insight usually sits one or two layers lower, where the story gets more uncomfortable.”
McCabe emphasizes that understanding the granular sources of revenue should precede other common business initiatives. In his view, before investing in new tools, agencies, commercial plans, or transformation programs, the foundational question of revenue origin must be answered accurately.
“Because until you answer that properly, most of what comes next is just intelligent sounding guesswork.”
Lee McCabe’s post serves as a critical reminder for leaders in PE-backed companies to look beyond polished presentations and confront the unvarnished reality of their revenue streams. By demanding a deeper, more granular understanding of what truly drives income, businesses can move from “intelligent sounding guesswork” to informed, effective value creation.
📝 About This Content
This article is based on insights shared by Lee McCabe on LinkedIn.
📅 Originally posted on May 25, 2026 | View original post on LinkedIn →