D’Ornano + Co. has built a methodology – Hybrid Growth Diligence – for assessing the intrinsic value and resilience of high-growth and disruptive businesses across industry sectors.Methodology
An Asset-Based Approach
D’Ornano + Co. focuses on assessing Growth Assets, those requiring the capture of new metrics.
Growth Assets fall into two categories:
- The “Disruptors”: Technology or Sustainability companies, driving the change towards the megatrends of Digitalization, Decarbonization and Sustainability.
- The “Agile Incumbents”: Companies across all sectors of the economy who place these megatrends front and center in their business models.
These Growth Assets span multiple geographies, industry sectors, asset-classes (VC/PE/Infra/etc.) and development stages (Early-stage, Growth, Buyout, etc.).
The D’Ornano + Co. Playbook: a three step approach
The Hybrid Growth Diligence Playbook
The D’Ornano + Co. Playbook is at the core of our differentiated approach to due diligence for high-growth and disruptive companies. Specific to Growth Assets, it allows private market investors and strategic acquirers to understand the quality of a company’s growth and profitability trajectory, as well as the material legal and ESG risks.
D’Ornano + Co.’s methodology layers due diligence over a proprietary framework that determines relevant financial, operational, legal, and sustainability KPIs, benchmarking growth against expected development stages and supporting its client’s ability to uncover hidden risks and opportunities. Beyond due diligence, this strategic analysis helps asset managers monitor and refine portfolio companies’ trajectories and adequately transform business models, creating more value and delivering superior results at exit.
The D’Ornano + Co. Playbook is used across all our products offering to determine winning companies and make a positive impact for our clients. It uses a 3-step approach:
Step 1 – Build the right framework
We start by gaining a clear understanding of the target’s business model category (e.g., Cloud Software, Cloud Infrastructure, E-commerce, etc.), industry vertical (e.g. HR Tech, ClimateTech, etc.) and key business characteristics.
This is achieved through:
We look at business models through multiple financial, operational, legal and ESG angles and better understand their complexity as such.
We take a long-term approach in understanding material risks and opportunities. We understand how forgoing a certain level of efficiency/performance today can lead to a sustainable performance in the future.
A tailored approach per Tech, Tech-enabled and Net-Zero business models and industry verticals
We understand the specific material and critical issues of companies across the Tech and Decarbonization spectrum, building on a unique track-record of performing due diligence on high- growth and disruptive assets.
Laying out this framework is the first step of our Hybrid Growth Diligence approach.
Step 2 – Perform multidimensional assessment on key pain points of growth-oriented companies at financial, legal and ESG level
To identify the winning companies within Growth Assets, we conduct a multidimensional assessment on financial, legal and ESG pain points of growth-oriented companies. Each pillar is composed of sub-pillars with specific questions and attached KPIs. This enables a benchmark-driven diligence approach at a very granular level, refined after each deal.
This multidimensional assessment allows for greater accuracy in responses provided and deeper insights for each question addressed.
Step 3 – Connect the dots synthesis
The results of the multidimensional assessment conducted on the different pillars are then confronted by team members from different backgrounds so as to judge their materiality and if deemed material to adequately transpose findings into the adjusted financial aggregates (i.e. Quality of Earnings, Quality of Debt, Adjusted ARR, etc.).
In the end, the Hybrid Growth Diligence assessment results in a matrix ranking each of the pillars to determine the resilience, growth perspectives, and risks surrounding the underlying asset. This is done through leveraging our unique knowledge of growth-oriented private companies and on extensive research conducted on publicly related technology companies allowing us to correctly position the target company amongst its peers.