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Navigate Private Equity

When a private equity firm offers funding, the amount is only one part of the decision. A private equity investment may change how your business is run, since your new partner plans to eventually sell the business and expects to earn a sizable return on its investment.

Weigh what comes with the money before you decide whether to accept.

Understand what the private equity firm wants

A private equity firm has a large pool of capital and a single overarching goal: to sell the company it buys for a profit. Private equity funds plan to hold a company for about three to five years. At the sale, a large portion of the gain goes to the firm, which owns a controlling stake in the business.

If you can accept that outcome, keep evaluating the offer. If you can’t, that answer matters more than the price.

Test the chemistry before you sign

If you remain with the business as a part-owner in a managerial role, you’ll work side by side with the firm for years. Make sure your team and theirs get along and share a similar business philosophy.

Do your own due diligence on the firm, which should include contacting other companies in its portfolio to get perspectives on their experiences. Among other things, they can tell you how the firm behaves after closing. Our article on why you might decline a private equity firm’s offer covers the warning signs.

Find out who will run the company

Ask whether the firm plans to be hands-on or hands-off in daily management. Some firms install their own management team after closing.

Consider how your team will respond if that happens, and decide before you sign whether you can accept it.

Compare the offer to your best alternative

An offer is only attractive when it’s weighed against other options. Your next best alternative might be:

An operating change or a staffing change
A bank loan
A silent partner taking a stake
Doing nothing

If an alternative gets you most of what the offer promises while letting you keep control, it may be the better path.

Read every term of the formal offer

Early conversations with a private equity firm can feel generous. Formal offers often look different, with terms that shift value away from you. Review every term before you accept, not just the headline price.

How Oaklyn Consulting helps with private equity offers

We help owners evaluate offers, model what they’re worth, compare them against alternatives and negotiate terms. We bill for time and charge no success fee, so we have no reason to push you toward a particular outcome.

A physician group once asked us to evaluate an unsolicited offer from a private equity-backed roll-up. We built a financial model for the practice, guided the doctors through due diligence and represented them in negotiations. The offer was fair, but the doctors declined it because they valued their autonomy more. We describe that engagement in how our time-based billing approach helps.

Frequently asked questions

Should I accept a private equity firm’s offer?

Accept it only if the price beats your best alternative, the firm’s plans for management and resale align with your goals, and the formal terms match what you were promised. Talk with the firm’s other portfolio companies before you decide.

How long do private equity firms keep the companies they buy?

Private equity funds expect to hold a company for about three to five years before selling it again. Expect the firm to manage your business with that sale in mind.

Will I keep running my company after a private equity deal?

That depends on the firm. Some are hands-off and keep existing management, while others bring in their own leaders, so ask the firm to clarify their management plans before you sign.

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Oaklyn Consulting brought senior-level attention and analytical rigor to every stage of the process. They understood my business, ran a thoughtful and disciplined sale process and helped me make sound decisions when it mattered. I couldn't have asked for a better team in my corner.”

Jarod BuschFounder, 911 Custom LLC

(If) you've never been through this before, you've never done it before, frankly you're out of your depth and you're lost, you need someone that's going to pilot this through with you, as sort of the copilot, and your mentor and advisor. I absolutely feel very strongly that that's the role that Oaklyn Consulting played for me, and I would always recommend them.”

Eric FulmerCEO, ShotFlow

Oaklyn Consulting did a great job for us on Axial. The unfortunate outcome there had everything to do with the company's situation and the market environment. The board and investors all agree on what a thorough, professional, top-notch job Oaklyn Consulting did for us. I wouldn't hesitate to work with them again and in fact will look for opportunities to do so.”

Board MemberAxial Exchange

That was the real value of Oaklyn Consulting, being able to add them to the deal midstream. If you’re in that situation, I think Oaklyn Consulting is a great fit.”

Mike WalshCEO, Essco Calibration Laboratory

If you’re on the fence, I would say meet Frank and his team. I would recommend him to anyone who is considering selling their company, even if they’re just exploring their options.”

Al HemondCEO, Professional Disability Associates

Without him, I wouldn’t have gotten these deals done. There’s no question in my mind.”

Janet ElkinCEO, IMN Enterprises

Eighty years of family history does not get sold in a hurry. Oaklyn Consulting understood that from the first conversation.”

Jamie SemprebonCalmont Beverage

Oaklyn Consulting told us to pause when everything in me wanted to keep moving. Six weeks later, we closed clean. That advice was worth more than the process itself.”

Jeremy GrenierCEO, Calmont Beverage

I know they had other clients, but we felt almost like we were their only one at the time just by how much attention they paid to us. They’ve got a good team that can walk you through the process step by step, and they’re going to give you the attention you deserve.”

Devan WelchSenior VP and General Manager, Powell Construction

We really appreciated your willingness to adapt to the unique nature of our engagement — i.e., advising both sides — rather than forcing us into a typical approach.”

It was a very helpful professional experience. You are very knowledgeable and explained how you work transparently, even offering that you were probably not a good match. That is rare. Most people try to force-fit their model to every opportunity.”

As I stated many times during our conversations, I so appreciate you and your team for interceding throughout this transaction. It made such an incredible difference!”

Excellent setup and organization of data as well as business-level guidance for transactions.”

Candidly — I appreciated that you were thoughtful about when and where to engage knowing that we had sensitivities to fees. It often felt like you’d give us tools we could use to work through things on our own and then jump back in as needed to add value where you uniquely could.”

You continue to be my go-to for business owners thinking about their business options. I appreciate your approach and everyone I have sent you has said good things.”

We Help Clients Succeed At Their Most Complex Transactions

When running a business, making the right and crucial capital decisions can be the difference between success and failure. With Oaklyn Consulting by your side, you can confidently make the decisions that will shape the future of your business.

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