---
title: "What Is Value Creation? Private Equity Glossary"
description: "Value creation is the work an owner or investor does to make a company more valuable, such as growing sales, improving margins and building a stronger team."
url: https://capstreet.multisites.ai/glossary/value-creation
publisher: Capstreet
phone: +1-713-332-2700
contact: https://capstreet.multisites.ai/contact
---

Strategy

# Value Creation

Value creation is the work an owner or investor does to make a company more valuable, such as growing sales, improving margins and building a stronger team.

Value creation is how a company becomes worth more. Common levers include sales growth, better margins, stronger leaders, better systems and smart acquisitions.

For example, a company with $5 million of EBITDA adds a sales team, upgrades its software and buys one small competitor. If EBITDA grows to $8 million, the company is worth more at the same [multiple](https://capstreet.multisites.ai/glossary/ebitda-multiple). The numbers are for example only.

For owners, value creation is both a goal and a test of a partner. A good partner should explain exactly how it will help. Ask for specifics, not slogans.

Capstreet describes its Capvalue Framework® in three stages: "Research", "Build Scalable Platform" and "Drive Business Transformation". It also notes: "There can be no guarantee that Capstreet will be successful in applying its Capvalue Framework®." See the approach at [building greatness](https://capstreet.multisites.ai/building-greatness). Related: [platform company](https://capstreet.multisites.ai/glossary/platform-company) and [buy and build](https://capstreet.multisites.ai/glossary/buy-and-build).

[Read nextThe Capvalue Framework®](https://capstreet.multisites.ai/building-greatness)

## Related terms

-   [Platform Company](https://capstreet.multisites.ai/glossary/platform-company)
-   [Buy and Build](https://capstreet.multisites.ai/glossary/buy-and-build)
-   [Incentive Equity](https://capstreet.multisites.ai/glossary/incentive-equity)

## Ready to get started? Let’s talk.

Tell us about your company and what you want next. Conversations are private, and there is no obligation.

[Start a conversation](https://capstreet.multisites.ai/contact)

[(713) 332-2700](tel:+1-713-332-2700)[connect@capstreet.com](mailto:connect@capstreet.com)

![Capstreet team members at a Houston elementary school for Houston Reads Day](https://capstreet.multisites.ai/_astro/houston-reads-day.DxNd9bIr_tggWP.webp)