We Hated Private Equity. So We Became the Buyer.
I got on a call with a founder who turned his single biggest fear, selling to private equity, into his business model.
He started a managed services provider in 2010. Grew it to about 75 people and $12 million a year. He is not a finance guy. He is an operator who got tired of the same call every month: some firm that wanted to buy what he built so they could “optimize” it into something he would not recognize.
His words: “We don’t like PE. We hate PE. We hate all these people trying to buy our business and tear apart what we built.”
So he did the thing almost nobody does when the assumption is that selling to private equity is the move. He stopped being the target and became the buyer.
Should I sell to private equity?
That is the question owners bring to this story. The story is the answer to the buyer-type question. It is not the answer to whether you should transact at all.
Sell to a fund if the capital, the cash you take, and the control you give up are a better life than the doors you still have. Whether any sale should happen is should I sell my business or keep it. Read this piece for what a private-equity path feels like from the operator’s side of the table.
Cash, in this story, showed up in two forms. First they bought with their own money. Later they took outside capital. Control is the part they refused to bundle with the cash. They did not describe an earnout, and they did not describe rolling a percentage of the company into a sponsor’s vehicle. I will not invent either one. What they did describe is below: capital from a partner who left them running the company.
Buy good companies and leave them alone
He found another founder in the same spot, running a $25 million shop. They started acquiring on their own dime. The rule was simple. Buy good companies and leave them alone. Leave everything the customer touches where it is. Merge the boring machinery in the back: one accounting system, one HR. Do not walk in with a clipboard and a reorg.
Today they are north of $80 million a year, 300 people, ten acquisitions in. Those figures are his account of his company, from that conversation. They are not a WCG deal result.
They are also not a rarity sitting outside the market. The MSP consolidation wave is real. It is happening with you or without you. The question is whether you are choosing a side of it. If you want one industry’s version of the same pressure, read how buyers have been pricing HVAC shops.
Private equity money and private equity control
Here is the part worth sitting with.
They did not reject private equity. They rejected private equity control.
When they took outside money, it came from a partner who said the useful thing a capital partner can say: “We don’t understand your space. We’ll give you the capital, you keep running it the way you run it.”
That is the deal a lot of founders do not know they can ask for. Money is one thing. A mandate to find efficiencies, handed to someone who has never run your customers, is another. People tape those together and call the package selling out. Untape them before you answer the call.
A sale to a fund can still be the right sale. Cash at close, a role, a team that wanted a larger platform, a company you are genuinely finished with. Know which of those you are buying. Price is part of it. How to value the business before you sell is where the price methods live. It is not this decision.
What this story supports, and what it does not
Cash: they could write checks, and later they accepted someone else’s capital.
A continued stake: they stayed in the company and kept running it. The structures owners use for that, when they are real, are minority recapitalizations, structured equity, and growth capital. Governance is the negotiation. Board seats, vetoes, and who decides on an ordinary Tuesday. A lot of founders assume outside capital means they have lost the company. That assumption deletes options they never priced.
A rollover, in the stricter sense, is what happens when you sell and leave a piece of your equity in the buyer’s entity. That can be a good trade or a leash. This founder’s story is the other shape: capital in, founder still operating, control discussed on purpose. Do not use his outcome as a template for a rollover percentage. He did not give us one.
An earnout is not in the story. If a buyer offers you one, judge it as deferred pay that depends on results you may no longer control. Do not look to this company for an earnout lesson. There is not one here.
The buyer in front of you
When you sell, you are choosing who runs the place the day after you sign.
The owner needs the specific buyer’s investment thesis, incentives, governance rights, and post-close operating plan. The label alone does not determine what happens after closing. A fund can leave the operation alone. An operator can walk in and rebuild it. You will not know which you have until those four are on paper.
If the buyer is the one who called you, the first questions are on your business is not for sale, until the right buyer shows up. Pick the buyer on purpose. That includes the buyer you decline.
The alternatives to selling
If you built something real and the consolidation calls have started, you have more options than a sale to private equity or a hope that the calls stop.
You can structure capital without handing over control. You can choose the buyer. In some cases you can be the buyer. Not everyone should roll up an industry. Everyone who is thinking about selling should know the difference between money and control.
If you are still choosing the outcome, that is should I sell or keep it. Take the assessment if you want the sort. A sell-side mandate is a later fit, on Sell-Side Mandates, and only after you have chosen a process. It is not the close of this story.
Questions owners actually ask
What is the difference between a financial buyer and an operator buyer?
The label is not the difference. Ask for the investment thesis, the incentives, the governance rights, and the post-close operating plan. The label alone does not determine what happens after closing. Price matters. So does who is in charge the next morning.
Can you take private equity money without giving up control?
Yes. Minority recapitalizations, structured equity, and growth capital let a founder take investment and keep operational control. Negotiate governance, not just the valuation. Board composition, vetoes, and day-to-day decisions. The assumption that outside capital equals a loss of control is how owners give the control away in their own heads first.
What is a private equity rollup?
A buyer acquires several smaller companies in one industry and combines them into a larger platform. Funds use rollups to build scale in fragmented industries, including managed IT and home services. Shared back office can be the value. The integration is not one thing. Some buyers leave the brand the customer knows. Some absorb everything. The HVAC market is one place that pattern is easy to see, and the write-up of it stays on that industry page.
