Selling Your Business to a Private Equity Buyer

What Owners Should Know Before Entering the Process

Selling to a private equity (PE) buyer has become one of the most common exit paths for successful privately held businesses. For owners seeking liquidity, growth capital, or a partial exit, private equity can be an attractive option—but it comes with important considerations.

Private equity firms typically acquire companies with strong cash flow, scalable operations, and capable management teams. Unlike strategic buyers, PE firms are financial buyers. Their goal is to improve the company’s value and exit again in the future, often within five to seven years.

One major advantage of selling to private equity is flexibility. Many deals allow owners to sell a majority stake while retaining minority ownership and continuing to run the business. This can provide both liquidity and the opportunity for a “second bite of the apple” when the firm eventually sells.

However, PE ownership also introduces new dynamics. Expect more formal reporting, performance benchmarks, and governance. Decision-making may shift, and growth expectations are often aggressive.

A successful PE transaction requires preparation: clean financials, a strong leadership team, and clarity around your post-sale role. Owners should also understand how deal structures, rollover equity, and earn-outs affect long-term outcomes, not just the headline purchase price.

Selling to private equity can be rewarding, but it’s not just a transaction, it’s a partnership.