Should Private Equity Play a Role in Your Business Exit Strategy?

Private equity commands more than $13 trillion in assets globally, with $3 trillion in dry powder waiting to be deployed. These figures are enormous, but private equity isn’t one unified entity. Large firms chasing billion-dollar deals operate very differently from the mid-market and micro-market firms that often pursue the types of small and midsize businesses we work with. Returns can be compelling, and interest from a PE buyer is increasingly common, but alignment matters far more than headline numbers.

Do you trust your deal partner?

The first question is simple: do you genuinely trust the firm? A strong offer means nothing if the buyer doesn’t understand your business or your industry. Evaluate their track record. Speak with owners they’ve worked with. Look for fair treatment, integrity, and transparency. Be cautious with convoluted earnouts or deal terms that could limit your ability to realize the full value of your business. A higher bid isn’t always better. Incentive alignment and shared values tend to outperform raw numbers over time.

Location and reputation also influence fit. Many business owners feel more comfortable with local or regional firms who understand their market dynamics.

Does the timing work for you?

Even with a trusted partner, private equity may not be the right path if the timing doesn’t support your financial life or retirement horizon. PE firms deploy capital over multi-year periods. Your exit horizon must match their investment cycle. Market conditions, business performance, and timing relative to your personal goals all shape whether PE is viable. A strong year can elevate valuation. A downturn can hinder it. Given how volatile recent years have been for many industries, buyers are cautious about inflated performance.

What does your business mean to you?

Liquidity and valuation are part of the equation — but so is your relationship with your business. Some owners are ready to hand over the reins immediately. Others struggle with the emotional shift or worry about legacy. PE firms, especially hybrid strategic acquirers, often reshape a business to integrate it into a broader portfolio. Consider how much involvement you want after the transaction, how much change you’re comfortable with, and how you want the next chapter of the business to unfold.

Private equity can be a powerful component of an exit strategy. It just isn’t the right fit for every owner. If you need help evaluating options or vetting a prospective partner, Masterpiece Capital is here to support your decision.