Growth-stuck portfolio companies can't cut their way to an exit. Finding out why growth stalled starts with the CEO's calendar.

This is a long post, so here's the TL;DR

• The pressure is rising. The 10-year Treasury is above 5%, and about $100 billion of PE-backed debt for software companies comes due in 2028 and 2029. Lenders and buyers will both ask the same question: is this company growing?
• Cost cuts won’t get you there. At the same Rule of 40 score, growth-led software companies trade at about 10x revenue and margin-led ones at about 4x.
• Diagnose before you fix. A growth-stuck company has to learn whether the problem is product-market fit, a new alternative (AI-native or homegrown), pricing or execution.
• Put the CEO on sales calls. One day a week, five or six first meetings, about 60 calls in 90 days. The CEO listens and the account owner runs the deal.
• Let AI read everything else. Point it at 12 to 18 months of proposals, CRM records, emails and call transcripts, then compare with what the CEO is hearing.
• Give it 90 days. Then decide whether the company is market-stuck, valuation-stuck or growth-stuck, and whether the problem is fixable within the hold period.

Michael Kalman, CEO of Propel Partners Advisory, came up through advertising and marketing, built and sold an ad tech company, and now advises startups and scale-ups on go-to-market. He recently met with the CEO of a young company that had badly missed its plan. In December, the CEO had given his board a model: monthly activity, closes and customer count, quarter by quarter. By September, the company was supposed to have about 20 customers. It had nine or ten.

Michael asked to see the CEO’s calendar for the summer. He wasn’t interested in anything personal. He wanted to count one thing: selling days. June had none. July had a couple.

The forecast was off because the CEO was.

Michael shared that story on a recent episode of ProPEllant, the podcast he and I record for PE operating partners, and it has stayed with me. In my last post, “Not Zombies but Not Exitable, Either,” I argued that the companies sitting in PE backlogs fall into three groups: market-stuck, valuation-stuck and growth-stuck. The growth-stuck companies have good products and viable markets but aren’t growing the way their potential suggests. I ended with a simple claim: the first job is diagnosis.

This post is about how that diagnosis gets done and who has to do it. I agree with Michael; it all starts with the CEO’s calendar, especially for young companies or those executing a pivot.

What’s changed since September

The case for acting now has gotten stronger since September 1.

The 10-year Treasury yield climbed to its highest level since 2002 in early October and was still above 5% this week, even after the Fed held rates at 3.75% to 4% on Oct. 28. Two of the 12 voting members dissented in favor of another hike, so relief isn’t on the horizon. For an LP, a risk-free return above 5% is a very real alternative to waiting on a portfolio that isn’t distributing. For a CEO whose company is growing in the low teens, it’s a reminder that capital has easier options than betting on the turnaround.

There’s a new pressure, too. The Wall Street Journal reported this week that PE-backed companies face a roughly $300 billion “debt wall” of risky loans coming due, about $140 billion in 2028 and $160 billion in 2029, and software companies account for about a third of it. Many of those six- and seven-year-old loans financed the 2021 buying spree, for companies sponsors expected to sell long before the notes matured. Companies usually refinance 18 to 24 months ahead, so the clock is already running, and higher rates have pushed sponsors to negotiate extensions instead. Bain’s Hugh MacArthur told the Journal that some of these businesses will get “the keys tossed back to the bank.”

A lender deciding whether to extend a 2021 loan will look hard at the same thing the next buyer will: whether the company is growing.

Meanwhile, S&P Global Market Intelligence counted 1,504 PE and VC exits in the first half of 2026, down 6% from a year earlier. Top-quality assets are still finding buyers. Many others are in limbo. In software, more than 27% of North American PE portfolio companies were acquired at least five years ago, and 11% have been held for seven years or more.

The exit window is selective. The question is whether your company can get selected.

You can’t cut your way to an exit

When growth stalls, the reflex is to protect EBITDA: freeze hiring, trim marketing, squeeze vendors. Those moves may be necessary. They can also set a trap.

Bain’s 2026 Global Private Equity Report captured the new math in four words: “12 is the new 5.” A deal that needed about 5% annual EBITDA growth to return 2.5x a decade ago now needs roughly 10% to 12%. McKinsey’s Global Private Markets Report 2026 makes the related point. Citing StepStone analysis, it notes that leverage and multiple expansion produced 59% of returns on deals done between 2010 and 2022. Those tailwinds are gone, which helps explain why PE operating groups have more than doubled in size since 2021.

Bain’s number is the current owner’s hurdle. The next buyer applies a different screen: the Rule of 40, revenue growth plus profit margin. Here is the trap. Meritech’s September 2026 analysis, summarized by The SaaS CFO, found that public software companies with similar Rule of 40 scores traded at about 10x revenue when the score was growth-led and about 4x when it was margin-led.

Consider two companies that each score 40. Company A grows 25% with a 15% EBITDA margin. Company B grows 8% with a 32% margin. Both pass the screen. But the next buyer, whether another sponsor or a strategic, faces its own version of “12 is the new 5” and has to believe it can grow EBITDA from its entry price. Company A leaves room for that. Company B has already spent most of its margin lever.

Cost cuts can get the current owner to its hurdle. They can’t give the next buyer a thesis.

Retention matters here, too. Advisors on lower-middle-market SaaS deals report that companies clearing the Rule of 40 with net revenue retention below 100% still received below-market multiples. Growth that leaks out the back of the business isn’t the kind buyers pay for.

What buyers are actually underwriting

Software Equity Group’s 2026 Buyers’ Perspectives Report surveyed more than 200 PE investors, strategic acquirers and software CEOs. 85% named AI-driven commoditization as the single biggest risk to SaaS value. SEG’s 2026 Annual SaaS Report adds that companies with strong retention and products embedded in core customer workflows were the most likely to attract buyers and premium valuations. And Allianz Research expects sponsors to restart software exits where growth is defensible and cash flows are robust.

Put those together and the buyer’s checklist looks something like this: growth that comes from the market rather than the spreadsheet, customers who stay and expand, a product that’s hard to rip out, and a credible answer to the AI question.

A growth-stuck company can’t show any of that until it understands why growth stalled.

Four questions a growth-stuck company has to answer

In the last post, I suggested that some stalled companies have fixable GTM problems while others face something more structural. In practice, the diagnosis comes down to four questions.

Has product-market fit eroded? The product that won deals in 2021 may no longer solve the most urgent version of the customer’s problem. If win rates are falling against the same competitors you used to beat, or usage is thinning ahead of renewals, the problem may be structural.

Has a new alternative changed the conversation? In many categories, the competitor is no longer only the vendor on your battle card. It’s an AI-native product priced without seats, or the customer’s own team building what it needs with tools like Claude. Long Angle’s analysis of the early-2026 software selloff describes investors betting on both threats. Michael made the same point about Salesforce on ProPEllant: plenty of customers will now accept less capability in exchange for escaping an annual price increase. This can be structural, though sometimes it’s a positioning problem that looks like a product problem.

Has the market repriced the category? Kyle Poyar’s 2026 State of B2B Monetization report found that roughly three in four software vendors changed pricing in the past year, and hybrid pricing grew from 25% to 37% of the market in twelve months. Benchmarkit’s 2026 data puts average net revenue retention at 98% for seat-based companies versus 108% for usage-based ones. If deeper discounts, seat reductions at renewal and requests for usage pricing keep showing up, the market is telling you something. This is usually fixable.

Is it execution? No clear ICP, sellers running in different directions, messaging that changes from rep to rep, churn nobody owns. Michael calls these the most common failures he sees. This is the most fixable of the four.

Each answer calls for a different response. Rebuilding the SDR team won’t fix eroded product-market fit. A new pricing model won’t fix a fuzzy ICP. A wrong diagnosis can burn whatever time is left in the hold period.

Why the CEO has to hear it firsthand

Last time, I suggested a question for operating partners: does the company know why recent customers chose it over increasingly similar alternatives? In most portfolio companies, the honest answer rarely reaches the board deck intact. Reps summarize it, sales leaders soften it, and pipeline categories reshape it. By the time it reaches the CEO, “they’re building it themselves” has become “timing.”

Buyers have also moved further from sellers than most dashboards show. 6sense’s 2025 Buyer Experience research found that buyers spent roughly eight months researching before first contact with a vendor, and the vendor they favored before that contact won more than 80% of the time. Pipeline reviews show the end of that journey. Sales conversations are where you can still hear how it went.

Michael put the role change plainly on ProPEllant: in this environment, the CEO’s job is the chief sales officer’s job. That’s a hard shift for many CEOs, especially those who came up through finance, product or engineering and never carried a bag. Michael recently met a highly accomplished AI executive who had never spoken with customers until his current role required it, and found it eye-opening. Customers will tell you exactly what problem they have and whether your product solves it, if you’re in the room to hear it.

There’s a second reason, and it has nothing to do with data. Sales teams at stuck companies know they’re stuck. When they see their CEO block out Wednesdays for first meetings, sit through objections and follow up on lost deals, the turnaround stops being a slide in a board deck. Watching the leader do the hardest job in the building is a potent morale booster. It also gives the team permission to try new things.

How a CEO selling day works

Michael’s model is simple enough to start next week.

Pick a day (e.g., every Wednesday) and make it a CEO selling day. SDRs load five or six first meetings of 30 minutes each. Thursday mornings absorb overflow. Once a week, the CEO visits a new prospect in person, within driving distance (Michael suggests about 70 miles).

The math is straightforward. Five new conversations a week is 20 a month. Over a 90-day diagnostic window, that’s 60 conversations with buyers, plus whatever the CEO learns from sitting in on active deals and lost-deal follow-ups.

A few guardrails keep this productive. Research by Noel Capon and Christoph Senn in Harvard Business Review shows how badly executive involvement in sales can go when the executive arrives unprepared or makes promises the company can’t keep. So the CEO’s job on these calls is to listen. The account owner runs the deal. The CEO makes no commitments on price, product or delivery without the team.

After each call, the CEO writes down three things: the alternative the buyer named, how the buyer reacted to price, and why the buyer is looking now. Across 60 conversations, those notes start to answer the four questions.

AI reads everything the CEO can’t

Sixty conversations are a lot for a CEO and still a small sample. That’s where AI earns its place in the diagnosis.

Most companies already have the raw material: 12 to 18 months of proposals, CRM records, closed-lost notes, email threads and recorded calls. Current AI tools can read all of it. Gartner acknowledged how far this has come in December 2025, when it created a single Magic Quadrant for Revenue Action Orchestration that merges what used to be separate conversation intelligence, revenue intelligence and sales engagement markets.

Point the analysis at the same questions the CEO is trying to answer (e.g., which competitor names appear in lost deals, how often pricing objections come up and whether that’s rising, how proposal language differs between won and lost deals, where deals stall and for how long, what customers say at renewal).

The value comes from putting the two views side by side. Where the CEO’s impressions and the AI’s patterns agree, you have a plan. Where they disagree, you know where to dig. A CEO who hears three prospects mention a homegrown alternative might dismiss it as noise, until the analysis shows the same theme across 40 lost deals. Or the data might show price objections rising while the CEO’s conversations reveal that price is the excuse and differentiation is the problem.

One caution: the analysis is only as good as what got captured. MarketsandMarkets estimates that up to 79% of the deal information reps collect never makes it into the CRM. That gap is often the first finding, and it’s another reason the CEO’s own notes matter.

New KPIs for a revival board deck

If the goal is to become the kind of company buyers underwrite, the board deck should track progress toward it directly. A few measures to add:

• Rule of 40 composition. How much of the score comes from growth and how much from margin.

• Net and gross revenue retention, with the reason behind every material loss.

• Win rate against named AI-native or build-it-yourself alternatives.

• Pricing objection rate and the trend in discount depth.

• Share of won deals where the company was on the buyer’s shortlist before first contact.

• CEO selling days per month. It’s a leading indicator, and one the board can see.

The 90-day plan for operating partners

Days 1 to 30. Put CEO selling days on the calendar and start the AI analysis of historical sales data. Write down an initial hypothesis for each of the four questions, so the team tests it rather than confirms it.

Days 31 to 60. Compare what the CEO is hearing with what the data shows. Reach a verdict: product, alternative, price, execution or some combination. Start the fixes that are clearly within reach (e.g., resetting the ICP, tightening messaging, testing pricing on new deals).

Days 61 to 90. Rebuild the board KPIs around the diagnosis and set a review cadence. Then make the call the last post was really about: is this company market-stuck, valuation-stuck or growth-stuck? And if it’s growth-stuck, can the problem be fixed within the hold period?

For an operating partner responsible for eight or ten companies, running each one through the same process makes it possible to rank them and decide where management attention and capital go first.

The fastest diagnostic in a portfolio company

Not every stuck company can be saved. Some will turn out to have structural problems that no GTM intervention can fix, and knowing that early is valuable, too.

But you can’t tell which companies can be saved from the boardroom. Dashboards show the outcome of the problem. Buyers can tell you the cause, if someone with the authority to act is in the room to hear it.

The fastest diagnostic in a portfolio company is still a CEO in a sales meeting.

If you’d like help structuring the diagnosis, the Austin Lawrence GTM Checkup was built for exactly this. And for more from Michael on CEO selling days, listen to our ProPEllant episode, “Which SaaS Portfolio Companies Are Worth Saving?”