The Truth about Private Equity

Private equity is good at taking profits and “juicing” the company. But what does that mean? It means that they will invest large sums of money that they expect to be paid back through the growth of your business. Initially, that may sound like a good financial strategy. 

But Private Equity has a dark side… 

• You end up with higher debt payments, so that's less money that can go to your people.

• You end up with more pressure to perform and that puts your people under stress

• You have to do want makes gives the Private Equity company the best financial return; not what is best for you, your people, or your customers.

All of this is in preparation for the “flip.” Private Equity buys companies to sell them again in 3 to 5 years.

In essence, your company is just another product for the Private Equity guys to make money from. No one wants their business to be seen as a “fixer-upper” that will be gutted and flipped for profit. If you go with Private Equity, get ready for the flip.