For private equity and boards
Price, cost, headcount, mix, a bolt on, a market. Each one is a line in the plan with a single number next to it and a management team who will tell you it is achievable. Counterfirm runs each lever against the same portfolio company doing nothing, hundreds of times, and gives you a band, a mechanism and the assumption the whole case depends on.
This is a modelling tool. It is not a valuation, it is not diligence, and it does not produce anything an investment committee should rely on as fact.
Said once, plainly, at the top: Counterfirm does not value anything. It has no comparables, no multiples, no discount rate, no cost of capital and no view on what anybody should pay. It simulates an operating business month by month. Anything about price, entry or exit is yours to bring.
Management gave you one path. The question is how wide the distribution around it is.
Every plan that reaches a board has already been through the filter of somebody who wants it approved, which is why the downside case is usually the base case with two inputs nudged. Drawing every uncertain parameter independently over four hundred runs produces a different object, and the gap between that p50 and the plan is a conversation worth having before the money moves.
The levers
Each lever runs against the same twin doing nothing, on the same seeds, so what you are reading is the effect of the decision rather than the noise between two runs.
A sweep gives you the whole response curve rather than the one point in the plan, plus how flat it is near the top. The flatness is often the real finding, because it tells you how much of the case survives getting the number slightly wrong.
Raise priceA layer out or a function gone, with severance, the month the saving starts, morale, attrition and the revenue attached to the people who left all carried in the same run.
Eliminate a departmentRevenue acquired and a company inherited. The run carries integration drag, the customer overlap and the competitor who reacts to a larger you, which is the half that decides whether the arithmetic held.
Acquire a companyEvery board paper mentions customer concentration. This runs it: the year in which the largest account does not renew, with the cost base that does not move on the same date.
Lose the largest customerAcross a portfolio
Each portfolio company gets its own twin from its own files. There is no cross company aggregation, no roll up view and no portfolio dashboard: two businesses in different industries start from different priors and comparing their medians would be a false equivalence.
What does travel is the method. The same six levers, the same four hundred run standard, the same ledger discipline, so a board paper from one company can be read against a board paper from another without translating between two different people's spreadsheet habits.
The useful discipline
The ledger is the part that changes board behaviour. A plan becomes a list of numbers with provenance against each one, and the defaults sit at the top because those are the ones nobody has evidenced yet.
A chief executive who believes churn will improve has to put that belief in the ledger as a number with a band. Then it is on the record, it is testable, and the tripwire says which month the first evidence arrives. That is a better governance loop than asking for confidence on a call.
Honestly, and this one matters
It is not a valuation tool. There is no multiple, no discount rate, no terminal value, no debt schedule, no waterfall and no return calculation. It does not tell you what to pay, what a business is worth, or what an exit looks like. If a run ever appears near a price, the price came from you.
It is not diligence and it is not a substitute for it. It reads the documents you give it and it cannot verify a single one. It will not find the revenue that was recognised early, the customer who has already given notice, the contract with the change of control clause, the litigation, the pension, the related party arrangement or the quality of earnings adjustment. A twin built from management numbers is a model of management numbers.
It is not assurance. Nothing here is prepared, reviewed or signed to any standard, and a run should be described in an investment paper as a model output with its assumptions attached, not as a finding.
It also does not know the sector. There is no market data, no deal comparables and no competitor intelligence beyond what is in your folder and a table of industry starting points.
Where it fits
| Diligence provider | Management plan | Counterfirm | |
|---|---|---|---|
| Verifies what is in the numbers | yes | no | no |
| Finds what is missing from the pack | yes | no | no |
| Produces a valuation or a return | yes | sometimes | no |
| Shows a range around an operating plan | sometimes | no | yes |
| Puts a reacting competitor in the model | no | no | yes |
| Names the assumption the case depends on | sometimes | no | yes |
| Can be re-run by the board in a minute | no | sometimes | yes |
| Carries professional liability | yes | no | no |
Counterfirm sits after the numbers are verified and before the plan is approved. It is a way of testing an operating case, not a way of avoiding the work that establishes whether the case is built on real numbers.
You can, provided it is presented as what it is: a simulation of an operating plan with its assumption ledger attached, including which assumptions are industry defaults. Presenting a p50 as a forecast, or a run as diligence, would be a misuse of it and the brief is written to make that hard to do accidentally.
Whoever holds the install. Each twin lives in one WordPress account and nothing is shared between accounts. In practice it works better when management owns the files and the board reads the briefs, because an assumption a chief executive has entered themselves is much harder to walk away from later.
Partly. There is cash on hand and a cash floor before a covenant bites, so a run can tell you in how many of its paths the floor is crossed and when. There is no amortisation schedule, no interest model and no facility structure. If the question is about the capital structure, this is not the tool.
There are no customer examples to show, because the product is new and this site does not carry testimonials or usage claims. The worked example is Harborline Components, an invented contract manufacturer, described as invented wherever it appears.
Run the pricing line of a value creation plan against the same company doing nothing, and read the ledger before you read the answer. The defaults at the top of it are the diligence questions nobody has asked yet.