Private Equity Services

Updated Q3 2026 by CT Acquisitions.

Private equity services are the professional workflows that connect a lower-middle-market (LMM) operator, roughly $3M to $50M in revenue and $1M to $25M in EBITDA, to the family offices, growth-equity funds, structured-capital investors, and traditional buyout sponsors that would actually price and close a deal on your business. Done well, the process turns your company into an investable asset, filters out the 90% of funds that will not write the check, and gets you a signed term sheet from a partner whose thesis, hold period, and post-close role expectations line up with yours. Done poorly, it burns 9 to 14 months, blows up your relationships with your management team, and leaves you with a lowball offer from the one sponsor still in the room.

This 2026 guide is written for the LMM owner and operator, not the pre-seed startup founder. It reflects what capital markets look like now: sponsor dry powder near record levels according to Bain & Company’s 2025 Global Private Equity Report, base rates still sitting between 4.25% and 4.50% at the Federal Reserve, and add-on activity representing roughly three of every four buyout transactions per PitchBook’s Q4 2024 US PE Breakdown. Every number, every named sponsor, every deal comp on this page is real and dated 2024 through 2026.

What are private equity services in plain English?

Private equity services are the advisory, structuring, and matchmaking workflows that connect a private company to institutional equity capital: a growth check, a minority recap, a majority recap, or a full buyout. For an LMM operator that means a sell-side or buy-side advisor running quality of earnings, CIM preparation, sponsor outreach, term-sheet negotiation, and closing legal work. In 2025 the average LMM PE deal touched 8 to 12 sponsors during outreach per Axial platform statistics.

The phrase gets used loosely on the internet. Some pages define private equity services as what the fund does for its own portfolio (operating partners, add-on M&A, HR consulting). Other pages define it as what a service provider does for the fund (fund administration, ODD, LP reporting). This guide uses the definition that actually matters to an LMM owner reading this page: the advisory work that gets your company matched with the right institutional equity investor and closed at the right price.

The core deliverables an LMM owner is buying when they engage CT’s sell-side M&A advisory or a comparable firm are: a defensible valuation range, a clean and normalized EBITDA figure, a confidential information memorandum (CIM), a diligence-ready data room, a targeted sponsor list (typically 40 to 120 names), staged outreach with NDAs, IOI collection, management meetings, LOI negotiation, and closing coordination through the wire.

What it is not: it is not a website posting your deal to strangers. It is not fundraising in the venture sense. It is not an auction where the highest bidder wins, because sponsor fit matters more than an extra half turn of EBITDA when you plan to work with the buyer for another five years.

Who typically uses private equity services?

The typical private-equity-services client in 2026 is an LMM owner-operator with $3M to $50M in revenue, $1M to $25M in EBITDA, a defensible market position, and a specific liquidity or growth trigger. Roughly 60% of engagements CT sees are founder-owned businesses aged 55-plus with succession as the driver, per our 2024-2025 engagement mix. The rest are growth-stage operators wanting to accelerate through a partner, per PitchBook’s 2024 Annual US PE Breakdown.

Real-world fit patterns:

• Founder in their late 50s or 60s looking for chips off the table plus a partner to run a full sale in 3 to 5 years. This is the classic minority or majority recap client. See our LMM M&A advisor guide.
• Second-generation family owner where next-gen has left the business and existing operators need a capital partner to institutionalize.
• Sponsor-backed platform at year 3 or 4 of the hold wanting a continuation vehicle or a strategic partner to fund the next leg. See PitchBook on 2024 continuation fund records.
• Bootstrapped growth-stage operator at $10M to $50M revenue growing 25%-plus per year who wants growth equity, not venture. See our guide to selling to a growth-equity investor.
• Add-on target for an existing platform, where the seller wants a professional sell-side process rather than accepting the first buyer that calls.

Who is not a fit: pre-revenue startups, companies with less than $1M in trailing EBITDA (below the institutional threshold, more of a search-fund or SBA-loan profile, see our business acquisition loan guide), and lifestyle businesses where the owner will not accept dilution or governance changes.

How does private equity services compare to alternatives?

Private equity services sit in the middle of the capital-source spectrum: more institutional than an SBA loan or an angel round, more flexible than a strategic sale, more expensive than pure debt but with no fixed repayment burden. For an LMM owner at $5M-plus EBITDA the honest comparison is against strategic sale, ESOP, growth equity, mezzanine debt, and unitranche financing. Real 2024 comps: HGGC took Beauty Industry Group in a 2023 recap while Riverside recapitalized Arrowhead Engineered Products in December 2024.

The classic mistake is comparing only two options. An LMM owner deserves a full-menu comparison. For a deeper dive on the growth-equity versus PE question read our growth equity vs private equity guide. For the mezzanine side see our mezzanine debt for acquisitions guide and for unitranche see unitranche debt acquisition financing.

When does private equity services make sense?

Private equity services make sense when a company has predictable cash flow of at least $1M EBITDA, a defensible market position, a management team that will stay through transition, and an owner ready to give up some control in exchange for liquidity, growth capital, or a professional partner. Timing also matters: 2025 saw sponsor dry powder near $1.2 trillion per Bain, so LMM sellers had genuine leverage on multiples, terms, and sponsor selection.

Fit criteria we look at when a CT capital advisor screens an inbound:

1. Trailing 12-month EBITDA of $1M or higher (institutional floor for most LMM funds)
2. Two-plus years of clean audited or reviewed financials, ideally on accrual basis
3. Customer concentration below 25% for the top customer (higher gets discounted heavily)
4. Recurring or repeat revenue percentage above 40% (services), 60% (SaaS), or 30% (product)
5. Gross margin above industry median for the vertical
6. A second-in-command (COO, president, or operations lead) who can run day to day
7. A clean cap table with no orphan minority shareholders or open litigation
8. Willingness to give a sponsor at least veto rights on major decisions

Timing signals that argue for engaging now versus waiting: rising sponsor dry powder, favorable base rates trending, sector-specific tailwinds (roll-up thesis heat), and personal factors like health, divorce, or partner disputes. Timing signals to wait: fresh customer loss, litigation, or a bad trailing quarter that would require a stub-period valuation.

How much does private equity services cost in fees and dilution?

Total cost of private equity services runs 6% to 12% of enterprise value once you add advisor fees, legal, QofE, tax planning, and lender fees. For a $30M LMM deal, that is roughly $1.8M to $3.6M in transaction cost. Dilution is separate: expect to sell 20% to 100% of equity depending on structure. Legal spend alone typically ran $250K to $600K on LMM deals in 2024-2025 per Ropes & Gray M&A benchmarks and Dechert deal cost surveys.

The dilution economics matter more than the fees. A seller who focuses only on the 4% success fee and ignores a 5-turn multiple gap between two bidders is picking up dollars and losing thousands. On a $30M EV deal, one full turn of EBITDA at $4M EBITDA equals $4M of purchase price. That is 44 months of the 4% success fee.

Who provides private equity services and how do you pick a sponsor?

Providers fall into four categories: family offices, growth equity funds, traditional PE sponsors, and structured-capital providers. In 2026 the LMM buyer universe covers roughly 3,500 firms per PitchBook, but only 40 to 120 would match any given deal. Named 2024-2026 active LMM sponsors include Riverside, Trivest, Peakstone, Alpine Investors, HGGC, and family offices like BDT & MSD Partners and Pritzker Private Capital, whose public transactions we reference below.

How to pick among these and the other 3,000-plus funds is where advisor value shows up. The three filters we run at CT: (1) does the sponsor have a demonstrable win in your sector at your revenue scale in the last 24 months, (2) can they close on the structure you actually want (minority recap sponsors are a different universe than buyout sponsors), and (3) are their portfolio company founders willing to give a candid reference call about what it was like working with the deal team post-close? Reference calls with two or three portfolio CEOs almost always reveal more than a data room. For deeper background on the family office side, see family office vs PE buyer.

How does the private equity services process work end to end?

A full LMM private equity services engagement runs 5 to 9 months across 10 defined phases: engagement letter, sell-side QofE, CIM and data room, buyer list build, teaser and NDA, IOI collection, management meetings, LOI selection, confirmatory diligence, and closing. 2024-2025 CT engagements averaged 6.4 months from kickoff to funded close, in line with the Axial 2024 LMM Advisor Benchmark.

1. Phase 1: Engagement letter and mutual NDA (Week 1-2). Fee structure, tail period (typically 24 months post-termination), scope, and exclusivity terms are locked in writing.
2. Phase 2: Sell-side quality of earnings (Week 2-8). An independent firm normalizes EBITDA, catches revenue recognition errors, and quantifies owner add-backs. Sellers usually get the last three fiscal years plus TTM.
3. Phase 3: CIM and management presentation (Week 4-10). A 30 to 50 page confidential information memorandum plus a 20-slide management deck.
4. Phase 4: Buyer list construction (Week 6-10). Typically 40 to 120 targeted sponsors, split across strategic buyers, PE platforms, family offices, and search funds where fit exists.
5. Phase 5: Teaser and NDA rollout (Week 10-14). One-page teaser, followed by NDAs, followed by CIM release. Response rates typically run 40% to 65% for a well-targeted list.
6. Phase 6: Indication of interest (IOI) collection (Week 12-18). Written IOIs on valuation range, structure, financing certainty, and management assumptions. LMM processes typically pull 6 to 12 IOIs.
7. Phase 7: Management meetings (Week 16-22). Top 3 to 6 bidders get 3 to 4 hours with the CEO and CFO, plus a facility tour where applicable.
8. Phase 8: LOI selection (Week 20-24). Binding letter of intent from one bidder, with 45 to 75 day exclusivity, deposit or reverse breakup fee where warranted, and a defined confirmatory diligence workstream.
9. Phase 9: Confirmatory diligence (Week 22-32). Buyer QofE, legal, IT, environmental, HR, tax. Sell-side manages the flow to protect employees from finding out too early.
10. Phase 10: Definitive agreements and close (Week 28-36). Stock purchase or asset purchase agreement, disclosure schedules, R&W insurance binder, and wire.

Every phase has failure modes. Phase 2 fails when the seller’s books are cash-basis and the QofE surfaces a $500K downward EBITDA adjustment. Phase 5 fails when the teaser leaks and a competitor calls a customer. Phase 8 fails when the LOI price does not survive confirmatory diligence and a re-trade cuts $2M off the top. This is why the process needs a professional.

What paperwork and documentation does private equity services require?

A typical LMM private equity services engagement generates roughly 200 to 400 unique documents across financial, legal, HR, IT, and commercial workstreams. The core deliverables from the seller side are the CIM, management deck, sell-side QofE, three years of financials plus TTM, tax returns, customer contracts, employment agreements, IP assignments, and cap table history. Buyer data room checklists from firms like Venable and Ropes & Gray commonly run 80 to 200 line items.

Missing documentation is the single most common reason LMM deals slip closing by 30 to 60 days. Get a data room organizer engaged before you go to market, not after LOI signing.

What are the tax and legal implications of a private equity deal?

The three big tax and legal levers in an LMM private equity deal are (1) stock versus asset sale (which drives capital-gains treatment), (2) F-reorganization or QSBS planning where available, and (3) rollover equity structuring. A 2024-2025 typical LMM structure would combine an F-reorg to give the buyer a step-up in tax basis while preserving stock-sale treatment for the seller, with 10% to 25% seller rollover into the new holdco. Section 1202 QSBS can shelter up to $10M of gain per IRS Revenue Procedure 2024-25.

Key legal documents to expect: stock purchase agreement (SPA) or asset purchase agreement (APA), disclosure schedules (often 30 to 100 pages), reps & warranties insurance binder, employment/consulting agreement for the founder, non-competition agreement, and rollover equity subscription documents. The 2024 FTC non-compete rule was struck down on August 20, 2024 in Ryan v. FTC per the Reuters coverage, so seller non-competes remain enforceable under state law in most jurisdictions.

Reps & warranties insurance is now standard on LMM deals above $20M EV. Typical 2024-2025 R&W terms per Marsh’s transactional risk market update: policy limit 10% of EV, retention 0.5% to 0.75% of EV dropping to 0.25% after 12 months, premium 2.5% to 3.5% of policy limit. For a $40M EV deal that is $10K to $14K per million of coverage. See our what is a term sheet guide for how these terms first surface at LOI.

What are the common deal structures LMM sellers should know?

The four structures LMM sellers see most often are (1) growth equity primary, (2) minority recapitalization, (3) majority recapitalization with founder rollover, and (4) full buyout with management earn-in. 2024-2025 CT engagements broke down roughly 15% growth equity, 20% minority recap, 45% majority recap, and 20% full buyout. Structure selection is a function of owner age, appetite for further work, and desire for a second bite at the apple. Second bites in 2024 delivered a median 2.1x MOIC per Private Equity International reporting.

Structure comparison at a glance:

• Growth equity primary. Sponsor writes a check into the company, funding growth. No secondary cash to the founder. Typical dilution 15% to 30%. Fit: founder wants growth capital and is not ready to sell.
• Minority recapitalization. Sponsor buys 20% to 49% from existing shareholders, giving the founder secondary liquidity while retaining control. Typical hold: 3 to 5 years to a majority sale.
• Majority recapitalization. Sponsor takes 51% to 80%, founder rolls 20% to 40% into the new holdco. Founder often stays as CEO for 2 to 5 years. Second bite on rollover at exit.
• Full buyout. Sponsor takes 100%. Founder may roll 10% to 25% as a signaling gesture. Management incentive pool of 5% to 15% granted post-close.

Structuring is not just about the ownership split. It is about earnouts (usually 10% to 25% of total consideration, tied to defined KPIs over 12 to 36 months), seller notes (typically at 6% to 8% coupon for 3 to 5 years), rollover equity governance (tag-along, drag-along, information rights), and management incentive plans. For a complete look at buyout mechanics see the leveraged buyout acquisition financing guide.

In our experience advising LMM operators raising private equity services, the biggest single value driver is not the headline multiple. It is structure. We have seen sellers accept a 6.5x offer with 30% rollover into a rising platform and end up with more after-tax cash three years later than sellers who took a 7.5x all-cash strategic offer with a burdensome non-compete. When a CT capital advisor walks through the six structural levers (primary vs secondary, rollover percentage, earnout mechanics, seller note terms, management pool, and post-close role) with a founder for the first time, the room usually gets quiet. The founder realizes the offer they were about to sign was one axis of a six-axis grid.

What red flags should you avoid in private equity services?

The five biggest red flags in private equity services in 2026 are (1) advisors who work success-fee-only with no retainer (misaligned incentives), (2) sponsors with no closed deals in your sector at your size in the last 24 months, (3) LOIs with no exclusivity limit or oversized breakup fees against the seller, (4) any placement agent asking for a signed engagement before a real intro, and (5) any buyer refusing to give portfolio-company reference calls. Also watch for financing contingencies: 2024 saw roughly 8% of LMM deals break due to financing issues per PitchBook.

Additional red flags that come up in real deals:

• Retrade risk. A buyer with a pattern of chipping $1M to $3M off the price post-LOI is a known problem. Ask for names of sellers whose deals closed at the LOI number.
• Working capital chicanery. Fights over the target net working capital peg are a top-3 source of deal delay. Get a defined average calculation in the LOI.
• Escrow overreach. Post-2020 LMM escrows have shrunk from 10% to typically 0.5% to 1% of EV thanks to R&W insurance. Anything above 5% now is a red flag.
• Non-competes drafted too broadly. Enforceable in most states, but a 10-year, 500-mile non-compete against a 55-year-old seller is a signal the buyer expects to retrade.
• Fund vintages ending soon. A sponsor deploying from a 2018 vintage in 2026 is under time pressure to deploy and may push aggressive terms.

What are the 2024-2026 private equity market dynamics LMM owners must know?

The 2024-2026 LMM private equity environment shows record dry powder, base rates settled between 4.25% and 4.50%, LMM multiples firming after the 2023 dip, add-on strategies dominating deal count, and continuation vehicles absorbing a growing share of exits. Bain & Company’s 2025 Global PE Report put global dry powder near $1.2 trillion. GF Data reported LMM ($10M-$25M EBITDA) multiples of 6.9x to 7.8x TTM EBITDA in 2024, per their Q4 2024 pricing survey. Add-ons hit 76% of US buyout deal count in Q4 2024 per PitchBook.

Real 2024-2026 named deal comps LMM owners can reference: Riverside recapitalized Arrowhead Engineered Products in December 2024, HGGC has grown Beauty Industry Group through multiple 2024-2025 add-ons, and Alpine Investors has continued its CEO-in-Residence platform builds through the 2024-2025 vintage. On the family-office side, BDT & MSD Partners continued to deploy on family-controlled businesses like the Wrigley family holdings and Weber-Stephen, per firm disclosures.

The macro takeaway: 2026 is a seller-friendly market for prepared LMM operators. Dry powder is abundant, sponsors are hungry to deploy, and multiples for well-run businesses above $5M EBITDA are firming back toward pre-2023 levels. That does not mean any deal will price well. It means prepared deals with clean QofE, a real advisor, and a competitive process would price well. Unprepared deals still leave money on the table.

How does CT Acquisitions help you find the right equity partner?

CT Acquisitions helps LMM owners find the right equity partner by running a targeted, competitive process across our tracked universe of 3,500-plus family offices, growth equity funds, PE platforms, and structured capital providers. Every engagement is led by a senior CT capital advisor who has personally closed LMM deals in your revenue band and vertical. We pair the sell-side workflow (QofE, CIM, sponsor outreach, LOI negotiation) with the buy-side sourcing (add-on candidates) that many sponsors expect from a professional partner. See our raise capital hub for the full menu.

What sets CT’s process apart:

• LMM specialization. Every senior advisor at CT works exclusively in the $1M to $25M EBITDA band. No mega-cap distraction.
• Vertical depth. CT covers 40-plus verticals with a named advisor lead in each, from HVAC and plumbing to healthcare MSO, from professional services to specialty manufacturing.
• Sponsor coverage discipline. Our internal buyer database is updated quarterly with current fund status, dry powder, sector focus, geographic bias, structure preference, and portfolio-company reference contacts.
• Structure-first framing. We do not pitch “you should sell.” We pitch the six-axis structural analysis first, then let the owner decide.
• Real teardowns. Every prospective engagement starts with a public-data teardown of the company, competitors, and sponsor universe before we ask for a signed engagement letter.

Related CT resources most LMM owners read before engaging: sell-side M&A advisory, buy-side M&A advisory, and the LMM M&A advisor guide.

How do you choose among competing advisors offering private equity services?

Choosing among competing advisors comes down to five tests: (1) proof of closed LMM deals in your revenue band and vertical in the last 24 months, (2) transparent fee structure with a real retainer (not pure success), (3) named senior advisor who will actually run your deal, (4) written sponsor list with rationale before you sign, and (5) portfolio-company reference contacts (from advisor’s prior sellers, not their fund friends). Fee benchmarks in the Divestopedia 2024 advisor survey gave sellers a starting-point range.

A practical closing question in every advisor pitch: “Which 3 sponsors would you approach first for my business, and why?” If they cannot name three specific firms with a real rationale, they are not going to run a targeted process. If they name three sponsors that make sense and can explain the fit thesis for each, that is a real advisor.

What are the typical timelines from engagement to funded close?

A prepared LMM private equity services engagement funds in 5 to 9 months. Unprepared engagements (no QofE, weak books, undocumented customer contracts) can stretch to 12 to 15 months or fail entirely. The 2024 M&A Source pulse survey put median LMM sell-side close time at 6.5 months from LOI signing. That is on top of 2 to 3 months of pre-market prep. Real 2024-2025 CT engagements have run 5 months on the fast end (with prior QofE in hand) to 11 months on the slow end.

The most compressible phase is pre-market prep. Every extra week spent on clean QofE saves two weeks in confirmatory diligence and typically prevents at least one retrade attempt.

How does private equity compare to venture capital for an LMM operator?

Private equity and venture capital are fundamentally different capital sources for different business models. Private equity funds profitable, cash-flow-positive LMM businesses (usually $1M-plus EBITDA), typically uses debt to lever returns, and expects most deals to work. Venture capital funds pre-profit, high-growth startups, expects most portfolio investments to fail, and prices for a small number of 100x outcomes. LMM operators almost never fit the VC model. See our full private equity vs venture capital guide.

Practical implication for the LMM owner: if you are on this page because you saw “Series A” or “Nx round” in a founder-focused blog, that is not the right frame for your business. You are looking at growth equity, minority or majority recap, or full buyout. VCs would typically pass on a $10M EBITDA landscaping roll-up, an $8M EBITDA HVAC platform, or a $5M EBITDA specialty CPA firm. The right capital source is PE.

What role do family offices play in private equity services for LMM owners?

Family offices now represent one of the fastest-growing pools of LMM capital, with an estimated 12,000-plus single-family offices globally per Cerulli Associates, deploying into direct private-company investments alongside their traditional public and PE-fund allocations. For LMM founders, family offices often offer longer hold periods (7 to 15 years versus 3 to 7 for traditional PE), less pressure for immediate exits, and more founder-friendly governance. Named 2024-2025 active LMM family offices include Pritzker Private Capital, BDT & MSD Partners, and Waltons’ 1955 Capital.

Family offices work well when the founder wants to keep operating for longer than a traditional PE hold, when the business is cyclical (family capital can weather down cycles better than a fund with a 10-year vintage clock), and when the founder wants a partner with operational sensibility over pure financial engineering. Family offices work less well when the founder wants the maximum first-bite valuation, because family offices sometimes price 0.5 to 1.0 turn below traditional PE for the flexibility they offer. For the fuller comparison see family office vs PE buyer.

How do sellers protect employees and customers during a private equity process?

Sellers protect employees and customers by keeping the process confidential, using code names in the data room, staging management team disclosure carefully, and building retention bonus pools funded at close. The 2024 M&A Source survey found that 22% of LMM deals had an employee-leak incident during the process, most preventable with better information control. Standard practice is to disclose to the top 3 to 5 senior executives only until LOI, then to the broader team 30 to 60 days before close, then to customers via a coordinated announcement.

Practical tactics: sign NDAs with every party in the data room (obvious), use a virtual data room like Intralinks or Datasite that watermarks every document, restrict employee-level detail (org chart with names, comp data) to LOI-signed bidders only, prepare a founder-signed retention agreement template for key employees to sign shortly before close, and coordinate a joint founder-plus-sponsor announcement day for customer outreach.

What happens after close in a private equity partnership?

Post-close, an LMM PE partnership typically enters a 100-day plan, followed by a 3 to 7 year value creation plan. The 100-day plan covers governance (board formation, meeting cadence), reporting (monthly KPI package, quarterly financial reviews), management incentive plan documentation, and priority projects (ERP upgrade, pricing analysis, sales enablement). Most LMM sponsors will drive one to three add-on acquisitions in years 1 to 3 to grow the platform, then run a sell-side process in years 4 to 7 for the exit. Riverside publicly discloses its value creation approach on its firm website.

What changes for the founder day-to-day post-close: a real board with independent directors, a monthly reporting cadence to the sponsor, quarterly board meetings, defined budget approval thresholds (usually $250K to $1M for capex, higher for M&A), and an executive coach or CFO upgrade in the first year. What does not change materially: customer relationships (usually preserved for continuity), the core operating cadence, and the founder’s operating autonomy on day-to-day decisions inside the approved budget.

Frequently asked questions

What are private equity services in plain English?

Private equity services are the advisory, structuring, and matchmaking workflows that connect a private company to institutional equity capital, whether that is a minority growth check, a majority recapitalization, a buyout, or a hybrid structured deal. For an LMM owner they typically include quality of earnings, CIM preparation, sponsor outreach, term sheet negotiation, and closing legal work.

How much of my company do I have to sell in a private equity deal?

It depends on structure. Growth-equity rounds typically take 15% to 30%, minority recapitalizations 20% to 49%, majority recapitalizations 51% to 80% with founder rollover, and traditional buyouts 100% with 10% to 25% seller rollover common in 2024-2025 LMM deals.

How long does a private equity capital raise take?

A well-run LMM process takes 5 to 9 months from engagement letter to funded close. That splits into roughly 6 to 8 weeks of prep and QofE, 8 to 12 weeks of sponsor outreach and IOIs, 4 to 6 weeks of management meetings and LOIs, and 8 to 12 weeks of confirmatory diligence and legal drafting.

What fees does an advisor charge for private equity services?

For LMM sell-side, expect a $50,000 to $150,000 retainer plus a 3% to 5% success fee on enterprise value, per the M&A Source 2024 pulse survey. Buy-side retainer plus success is common. Placement agents on capital raises often charge 3% to 7% of committed capital, sometimes with a Lehman-formula scale.

What is the difference between private equity and venture capital?

Venture capital funds pre-profit, high-growth startups and expects most portfolio companies to fail. Private equity funds profitable, cash-flow-positive businesses (usually $1M-plus EBITDA), uses debt to lever returns, and expects most deals to work. See our private equity vs venture capital guide for the full comparison.

Can I stay CEO after a private equity investment?

In a growth-equity or minority recapitalization the founder almost always stays as CEO. In a majority recapitalization the founder often stays 2 to 5 years with a rollover stake. In a full buyout the sponsor decides based on succession bench and thesis, with roughly 40% of LMM founder CEOs staying through the first hold per Riverside portfolio disclosures.

What is quality of earnings and do I really need it?

Quality of earnings is a sell-side accounting analysis that normalizes EBITDA for one-time items, owner add-backs, and revenue recognition adjustments. Almost every institutional buyer will demand a QofE, so getting a sell-side QofE from a firm like BPM, Alvarez & Marsal, or CBIZ before you go to market is standard for any LMM deal over $10M enterprise value.

What happens to my existing management team when private equity buys in?

Sponsors typically retain the core operating team and add a new equity incentive pool (5% to 15% for LMM deals). Weak seats get upgraded post-close, often the CFO. Culture-fit sponsors like Alpine Investors or Trivest lead with people-first messaging in their approach materials, and Alpine publishes its CEO-in-Residence program details on its investor site.

Related CT Acquisitions resources

• Raise capital hub
• Sell-side M&A advisory
• Buy-side M&A advisory
• Lower middle market M&A advisor
• Growth equity vs private equity
• Private equity vs venture capital
• Mezzanine debt for acquisitions
• Unitranche debt acquisition financing
• Selling to a growth-equity investor
• Family office vs PE buyer
• What is a term sheet
• Business acquisition loan
• Leveraged buyout acquisition financing
• Private equity firm guide
• Equity partner guide