How 53 Capital Saved $2.1M Annually Across 11 Portfolio Companies

The Challenge

James Liu, Operating Partner at 53 Capital, had a portfolio problem. The firm had acquired 11 companies over 5 years, ranging from $15M to $95M in revenue. Each had been a great deal. But finance operations across the portfolio were a mess.

"Every company had different processes, different systems, different close timelines," James explains. "Company A closed books in 8 days. Company F took 18 days. Company H couldn't give us a straight answer on when they'd be done. We couldn't get consistent reporting for our IC or LPs."

The finance maturity varied dramatically. Some companies had experienced CFOs and Controllers. Others had bookkeepers stretched into finance roles. Manual processes were everywhere—spreadsheets for reconciliations, email chains for approvals, paper expense reports.

"We'd try to implement improvements, but the portfolio companies resisted," James says. "They'd say 'We're too busy' or 'Our business is different' or 'That won't work with our systems.' Meanwhile, finance costs as a percentage of revenue were creeping up across the portfolio."

The numbers were concerning. Across the 11 companies, finance operations employed 87 people. James calculated that best-in-class companies of similar size would need about 55-60 finance FTEs total.

"We were carrying 25-30 extra finance employees across the portfolio," James explains. "That's $2M+ in annual costs that should flow to EBITDA."

The Solution

James discovered Lateral at a PE operating partner conference. The concept of deploying the same AI agents across all portfolio companies—regardless of their underlying ERP systems—solved his standardization problem.

"I didn't want to force all 11 companies onto the same ERP," James explains. "That would cost millions and take years. But we needed standardized processes. Lateral sits on top of whatever system each company uses and creates a consistent operating model."

53 Capital started with two pilot companies in January 2024—a $28M manufacturing company and a $65M business services company. After proving value, they rolled out to the remaining 9 companies over the next 12 months.

The Results

Pilot Phase (Companies 1-2, Months 1-4):

• Both companies reduced close from 12-14 days to 5-6 days

• Finance headcount requirements decreased by 30%

• Avoided 3 planned finance hires across the two companies ($210K savings)

Expansion Phase (Companies 3-11, Months 5-12):

• Rolled out to remaining 9 companies with learned best practices

• Faster implementation (6 weeks vs. 8 weeks for pilots)

• Portfolio-wide standardization achieved

Current State (Month 15):

• All 11 companies on Lateral with standardized processes

• Average close time: 6 days (down from 13 days)

• Finance operations: 63 FTEs (down from 87)

Portfolio-Wide Impact:

• $2.1M annual savings from avoided hiring and attrition

• EBITDA improvement across portfolio

• Consistent monthly reporting by day 8

• Better visibility for IC and LP reporting

• Standardized metrics enable benchmarking