Private Equity
They do this for a living
A private equity firm negotiating with an owner-operated company is working on a transaction it has done many times before, while the owner works on their first. The documents are standard to one side and unfamiliar to the other. This practice sits on the owner's side of that conversation.
Most owners of successful closely held companies will hear from private equity, usually by phone, usually more than once.
Some of those conversations are worth having. Outside capital can fund growth that debt will not reach, let an owner take money off the table without leaving, and bring in operating experience the business lacks.
The price of it is rarely the hard part: owners examine it most closely and it is most easily understood. The difficulty is everything attached to it — who decides what afterwards, what happens if the plan is missed, what the retained stake is actually worth and when it pays, and who the business gets sold to at the end of the hold.
A sale ends. A partnership continues. This practice is about the years after the money arrives, decided before it does.
None of these are answered in the term sheet.
What does this firm need from us to earn its own return, and on what timetable?
Which decisions still belong to us after closing, named specifically?
What happens in year two if we miss the plan?
What is the retained stake actually worth, and under what conditions does it pay anything?
Who do they expect to sell this business to, and when?
What does the board become, and what requires its approval?
If this partnership does not work, how does an owner get out, and at what price?
How the work takes shape.
Capital partner assessment
Who this firm is beyond the pitch: where the fund is in its life, how long it typically holds, what it has done with companies of this size and sector, and how it has treated founders whose businesses underperformed. Much of this is a matter of record, and the rest can be learned from people who have been through it.
Terms in commercial language
What the proposed structure means in practice. Control provisions, board composition, preference, ratchets, drag-along and tag-along rights, and the conditions attached to the retained stake. We read these for what they do to the owner under good and bad outcomes, alongside the client's attorney, who owns the legal questions.
Governance and retained control
What the owner keeps, what they give up, and which specific decisions move. Hiring, compensation, capital spending, acquisitions, and the owner's own role and removal. Expressed as a list rather than a principle, because that is how it will be applied.
The value creation plan
What the firm expects the business to do, whether that is achievable with the people and systems currently in place, and what it would cost to attempt. Plans that look ambitious at signing become obligations afterwards.
The hold period and the exit
What the owner's working life looks like for the next several years, who the likely eventual buyer is, and whether the owner's timing and the fund's timing are compatible. Misalignment here surfaces late and is expensive to resolve.
We do not raise capital, introduce clients to funds, or take any fee connected to a transaction being completed.
That matters more here than almost anywhere else. A private equity firm arrives with lawyers, accountants, operating partners, and people who negotiate these agreements full time. Much of the advisory industry around these transactions is paid, directly or eventually, by the capital side. The owner frequently has an attorney reading the documents and nobody reading the relationship.
Our work is to make the asymmetry smaller: to say what the terms will mean on an ordinary Tuesday in year three, which parts are genuinely standard and which are not, and what the business is agreeing to become.
We work for the owner.
Not the fund, not the intermediary, and not the transaction. If you have taken a call and want to understand what was actually proposed, that is a reasonable place to begin.
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