Private Equity Financing

A loan is debt you repay with interest while keeping full ownership. Private equity is capital exchanged for an ownership stake. There are no monthly payments, but you share future upside with your investor. Many owners use it precisely because it adds capital and expertise without adding debt service.

It depends on how much capital you raise and your company's valuation. Growth equity and minority deals typically range from 10% to 49%, letting you keep majority ownership. Buyouts involve a majority stake or a full sale of the business.

Not necessarily. In minority and growth-equity deals, the founder remains the majority owner and continues to run day-to-day operations. Investors may request board seats or observer rights and certain approval (veto) rights on major decisions, but the existing team typically retains control.

PE targets established businesses, not startups. Lower-middle-market firms generally show around $10M–$100M in revenue, $2M–$10M in EBITDA, and enterprise values of roughly $10M–$100M, though thresholds vary by firm and industry. If you're close to the mark, an advisor can help you find the right fit.

Private equity moves more deliberately than a loan. Expect roughly 3 to 9 months from first conversation to close, covering positioning, investor matching, due diligence, negotiation, and final funding.

Equity investors earn their return when the business grows in value and is sold or taken public, usually within a 3-to-7-year hold. That's why they actively work to make the company more profitable and valuable during the partnership.