AmiSight 9/14: Take Pause Before Jumping on the Private Equity Bandwagon
A new friend received a phone call a few weeks ago from a Private Equity firm doing a roll-up in his industry. He took the call and got intrigued. So now they call weekly, trying to push him to the finish line.
My advice is to slow down. First, think through what you are trying to accomplish and why you believe Private Equity is the best way to go. Then, build a completely different scenario and debate the pros and cons.
In this case, my friend's business has two divisions, and the Private Equity group is interested in one of them. I encouraged him to explore other alternatives, including bringing in a more seasoned management team on his own.
If he elects to pursue Private Equity, the best path forward will be to call several firms interested in his space and start a competitive process. Don't assume the first call is the best offer !!