Things Every Founder Should Know About Private Equity (Before You Say Yes)
Private equity gets a bad rep—and sometimes for good reason. For years, the PE world has been dominated by aggressive roll-ups, strip-it-and-flip-it models, and boardrooms full of people who’ve never built a thing in their life.
But that’s not all private equity has to be. Done right, it can be a powerful tool for founders to scale, exit, or get a second wind—without losing their values.
Here are 7 things to understand before you sign any PE deal.
1. Not All PE Is Created Equal
There’s a world of difference between:
Traditional PE firms looking for EBITDA extraction
Strategic PE focused on building platforms
Founder-led PE like Founder Capital, who back humans—not just numbers
Before signing up, ask who’s really in control—and what the fund’s endgame is.
2. You Don’t Have to Sell the Whole Thing
Private equity doesn’t always mean full acquisition. You can:
Sell a minority stake
Do a management buy-out with PE support
Sell the business but stay on as CEO or Chair
You set the terms. If the deal feels like a takeover, it probably is.
3. The Right PE Partner Brings More Than Money
Capital’s important. But so is:
Strategic input
Operational improvement
Hiring, branding, tech
At Founder Capital, we offer all of that—because we’re operators too. We’ve built firms, led teams, and dealt with the same challenges.
4. PE Can Supercharge Succession Planning
Thinking about retirement? Transitioning leadership? Want to reduce your personal risk?
PE can help you:
Step back gradually
Empower your second-in-command
Realise value while the firm keeps growing
The AD Group Fund specialises in this model—we turn great businesses into platforms.
5. Cultural Fit Matters More Than You Think
A mismatch in values, pace, or ambition will kill a deal post-signature. Make sure your PE partner:
Understands your vision
Respects your legacy
Doesn’t treat your people like numbers
We care about culture. We run people-first businesses. And we’re not here to ruin yours.
6. Read the Fine Print
PE term sheets can be loaded with:
Ratchets
Earnouts
Preference shares
Management conditions
Get legal advice. Ask questions. If you don’t understand it, don’t sign it.
We keep things clean, fair, and founder-friendly—on purpose.
7. It Should Still Feel Like Your Business
Yes, there’s new ownership. Yes, there’s change. But you should still feel:
Empowered
Respected
Excited for what’s next
If your gut says you’re being sidelined—listen to it.
With the right PE partner, you can grow faster, reduce risk, and still stay true to the mission.
Final Thought
Private equity isn’t the villain. It’s a tool.
But like any tool, it’s only as good as the people using it.
If you want a PE partner who thinks like a founder, acts like a partner, and plays the long game—we’re here.