Private Equity and Non-Controlled Investing

By Generational Equity

01/23/2023

Folks running Private Equity firms (PE) have always amazed us with their creativity. They simply will come up with any way to finance and close a deal that makes strategic sense.  One trend that has emerged in the past few years is PE’s interest in closing “non-controlled” investments.

Historically, PE firms have focused on acquiring +50% of a company’s stock/assets in order to “control” the post-acquisition management/integration/growth etc.  Recently, middlemarketgrowth.org released an interview they did with Jamie Elias, Partner at Trivest Partners, a firm that has closely focused on non-controlled investments the last few years. It is an interesting interview and you can watch it here:

• Why Non-Controlled Investing is Gaining Ground

If you observe the entire interview, what you realize is that this is great news for owners of privately held companies, especially those that do not want to exit immediately and are essentially seeking funding for growth.  PE firms like Trivest can provide a tremendous opportunity to gain access to capital, managerial talent, professional growth strategies while at the same time, monetizing a portion of a business.

This trend is a true win-win for business owners and PE firms.  

One of the reasons our Company has been so successful over the years is that our deal teams are incredibly creative as well, always searching for the optimal solution for our clients and helping to find the finest buyers for each company’s individual circumstances. Just like every business owner is unique, so too are their individual needs. This makes creativity paramount to deal closing success.  

So, when you are starting down your road to an exit, make sure that you leave all your options open. If you don’t want (or need) to exit 100% immediately consider approaching a buyer that will work with you to achieve your personal financial goals and create a mutually beneficial arrangement.

To learn more about how to do that, I would invite you to attend a Generational Growth and Exit Planning Conference near you.  Doing so will open your mind to a world of possibilities that you have most likely never considered.  You can find a conference near you here.

Keep in mind that the optimal way to sell your company is to sell a controlling interest in it to a professional buyer and also realize that Trivest is one PE firm out of thousands; most are still primarily interested in making controlled investments. Although as we said, PE firms have some of the most creative minds in the industry working for them and who knows how many different deal structures we may see five years from now!

Carl Doerksen is the Director of Corporate Development at Generational Equity.

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