Private Equity Experience

In this episode, we dive into the world of private credit and its relationship with private equity. Our hosts, Rory, Emily and Ed, share their expertise on the differences and similarities between these two asset classes.

Key Takeaways:
Private credit refers to debt financing that is not publicly traded and is typically provided by private companies or investors.

Private credit is not a new phenomenon, but its terminology has become more prominent in recent years as a separation from traditional banking and debt financing.

Private credit is often used in conjunction with private equity, and both asset classes share similar players, such as limited partners (LPs) and endowments.

The risk profile of private credit is different from private equity, with private credit being generally less risky but offering lower returns.

The capital stack is a key concept in private credit, with different levels of risk and return, including senior secured, mezzanine, and equity.

Private credit can be used to provide financing for companies that may not be able to access traditional bank debt or may need additional capital to support growth.

Private Credit vs. Private Equity:
Private credit provides steady cash flows through monthly or quarterly interest payments, whereas private equity returns are typically realized through a lump sum at the end of the investment period.

Private credit is generally less risky than private equity, but offers lower returns.

Private credit can be used to balance a portfolio by providing a steady income stream, whereas private equity is often used for growth and upside potential.

Private Credit Market:
The private credit market is growing rapidly, with assets under management expected to exceed $10 trillion by 2032.

Private credit funds are used to provide debt financing to companies, and can be structured in various ways, including mezzanine debt and preferred equity.

The private credit market is less regulated than traditional banking, offering more flexibility in structuring and terms.

Takeaways for LPs:
Private credit can be an attractive option for LPs looking for steady cash flows and reduced risk.

Private credit can be used to balance a portfolio by providing a steady income stream.

LPs should consider private credit as a complement to private equity investments.

Final Thoughts:
Private credit is not a new asset class, but its terminology has become more prominent in recent years.

Private credit offers a unique combination of risk and return, and can be used to support growth and provide steady cash flows.

LPs and investors should consider private credit as a viable option in their investment portfolios.

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🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

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Summary:
In this episode, the hosts discuss the current economic environment, tariffs, and their impact on private equity. They also explore the concept of "trapped equity" and how it affects private equity firms. The conversation touches on the uncertainty created by tariffs, the risk premium required, and how it changes the dynamics of buying and selling assets.

Key Takeaways:
Tariffs create uncertainty: Tariffs lead to uncertainty, which can result in inaction and trepidation among investors and private equity firms.

Trapped equity: Trapped equity refers to assets that have appreciated in value but are difficult to sell or liquidate due to market conditions.

Impact on private equity: Tariffs and economic uncertainty can decrease transaction volume, making it harder for private equity firms to sell assets and return capital to investors.

Risk premium: The risk premium required by investors increases in uncertain times, making it more expensive for private equity firms to finance deals.

LPs want liquidity: Limited partners (LPs) want to see liquidity and returns on their investments, which can put pressure on private equity firms to sell assets.

Contrarian opportunities: In a recession, some private equity firms may see opportunities to buy distressed assets at lower prices.

Predictions:
Tariff situation: The hosts predict that the tariff situation will improve because it cannot get much worse.

Recession likelihood: Ed predicts a 100% chance of a recession in the next 18 months, while Rory agrees that it's almost inevitable.

Recession depth: The hosts believe that the recession will not be as severe as the 2008 financial crisis and that there will be intervention to mitigate its effects.

Advice for Founders and Private Equity Firms:
Be prepared for uncertainty: Founders and private equity firms should be prepared to navigate uncertain market conditions.

Look for contrarian opportunities: In a recession, look for opportunities to buy distressed assets at lower prices.

Vet private equity firms: Founders should carefully vet private equity firms and consider their investment thesis and approach in uncertain markets.

Conclusion:
The hosts conclude that private equity firms will continue to adapt to changing market conditions and that there will always be opportunities for innovation and deal-making. They also emphasize the importance of being prepared for uncertainty and looking for contrarian opportunities in a recession.

==============================

🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

What happens to leadership teams when private equity enters the picture? In this revealing episode of The Private Equity Experience, Emily Sander, Rory Liebhart, and Ed Barton discuss the dramatic shifts that occur when PE firms acquire companies. Drawing from their battle-scarred experiences, they explore how founders navigate new stakeholder relationships, why CFOs often become CEOs, and the critical importance of meeting financial covenants. Learn why "business as usual" isn't an option, why flash reports become non-negotiable, and how to identify hidden talent during reorganization. Whether you're a founder considering a PE partnership or an executive navigating post-acquisition waters, this episode offers invaluable strategies to survive and thrive when the deal closes.

#PrivateEquity #Leadership #MergersAndAcquisitions #CEOTransition

Timestamps:
00:00 Introduction to Post-Deal Changes
01:04 Initial Leadership Changes
04:32 Navigating Founder and CEO Transitions
09:43 Collaborative Solutions and Team Dynamics
11:27 The Role of Chief of Staff
15:34 Legal and Insurance Considerations
29:25 Recognizing and Promoting Hidden Talent

==============================

🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

This episode of The Private Equity Experience dives deep into the crucial and often dramatic world of business valuation in private equity deals.  Hosts Emily Sander, Rory Liebhart, and Ed Barton explore the complexities, emotions, and strategic considerations determining a company's worth during the "buy phase." They discuss key valuation methodologies (revenue multiples and EBITDA multiples), the importance of revenue recognition, and how "corporate hygiene" (organized and accurate financial records) directly impacts perceived risk and, ultimately, the final valuation.  The hosts emphasize that getting the valuation right is paramount, as it sets the tone for the entire private equity hold period and impacts the relationship between the seller and the PE firm. They use the analogy of selling a house to show how expectations and values can differ. The episode explains the importance of understanding your audience in pitches.

Timestamps:

00:00 Introduction: The High-Stakes Deal
00:16 Structuring the Deal: Key Considerations
00:41 Valuation Methodologies and Emotional Factors
02:33 Real Estate Analogy: Setting Expectations
03:34 Investment Bankers: Bridging Perception and Reality
04:50 Revenue Recognition: A Critical Component
07:27 EBITDA Explained: Understanding the Basics
08:34 Adjusted EBITDA: The Art of Creativity
14:43 Choosing the Right Investment Banker
21:45 Corporate Hygiene: Preparing for Valuation
26:27 The Importance of Accurate Valuation
28:43 Conclusion: Setting the Table Right

==============================

🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

In this informative episode of the Private Equity Experience podcast, hosts Emily Sander, Rory Liebhart, and Ed Barton break down the complex world of private equity, venture capital, and series funding. Learn the differences between VC and PE firms and how to navigate the ecosystem to secure funding for your startup. Discover the importance of assembling a strong team of advisors and resources, including investment banks, financial advisors, and startup accelerators like Y Combinator and Startup Grind. Get insights on preparing for private equity investment and learn about essential books like "On Ramp to Exit" that can help you on your journey. Tune in to this episode to gain a deeper understanding of the private equity landscape and take the first step towards securing funding for your business.

Timestamps:
00:00 Introduction and Acronyms Galore
00:52 Understanding Private Equity and Venture Capital
01:33 Differences in Investment Strategies
02:47 Success Rates and Baseball Analogies
05:23 Fund Structures and LP Investors
07:40 Venture Capital vs Private Equity: Key Differences
09:50 Series A, B, and C Explained
11:13 The Transition from VC to PE
13:54 Bootstrapping vs Seeking VC Funding
15:57 Optimism in Startups vs Financial Plays in PE
16:27 Different Perspectives in Early-Stage Companies
17:00 Final Thoughts on Investment Strategies
18:00 The Importance of Consistency in Performance
18:21 Understanding Private Equity Hit Rates
18:36 The Concept of Zombie Companies
19:20 Private Equity vs. Venture Capital Strategies
23:53 Navigating Board Seats and Ownership
30:47 Advice for Founders Seeking Investment

==============================

🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

Description: Delaware has been the go-to state for incorporating businesses due to its business-friendly environment, strong case law, and lack of business taxes.

The recent court case involving Elon Musk's compensation package has raised questions about Delaware's predictability and has prompted some companies to consider alternative states like Texas, Wyoming, and Nevada.

While Delaware will likely remain a popular choice for incorporation, especially for larger companies, the changing landscape prompts companies to consider their options and consult with legal and financial advisors.

Businesses must focus on their core operations while being aware of the legal and financial implications of their structure and location choices.

00:00 Introduction and New Year Greetings
00:50 Reflecting on 2024 Achievements
01:06 Trending Topic: Delaware's Business Appeal
01:25 Elon Musk's Compensation Controversy
02:43 Why Delaware? Historical Context
05:49 Recent Legal Shifts in Delaware
07:02 Emerging Alternatives: Texas, Wyoming, Nevada
12:59 Legal Nuances and Case Law
19:51 Practical Implications for Businesses
27:07 Future Outlook and Strategic Considerations
28:58 Advice for Founders and Business Owners
33:19 Conclusion and Final Thoughts

==============================

🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

In this episode of the Private Equity Experience podcast, Ed and Rory dive into due diligence, a crucial step in buying or selling a business. They explain what due diligence is, how it works, and why it's essential for determining a company's valuation. The hosts also discuss the importance of working with experienced professionals, such as investment banks and financial advisors, to navigate the due diligence process and ensure a successful transaction. Learn the importance of due diligence in buying or selling a business and how to navigate the process with experienced professionals. Get tips and resources for finding reputable investment banks and financial advisors.

Show Notes:

• What is due diligence, and how does it fit into buying or selling a business?
• The importance of due diligence in determining a company's valuation
• How to conduct due diligence on potential partners or buyers
• The role of investment banks and financial advisors in the due diligence process
• Tips for working with experienced professionals to navigate the due diligence process
• Resources for finding reputable investment banks and financial advisors

01:14 Understanding the Due Diligence Process
07:14 Costs and Challenges of Due Diligence
09:08 Green Flags and Red Flags
22:34 Common Pitfalls and How to Avoid Them
28:02 Preparing for Due Diligence

==============================

🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

The Private Equity Experience podcast discusses the buy phase of private equity, focusing on the preparation required for business owners to sell their companies. The hosts, Ed Barton, Emily Sander, and Rory Liebhart, emphasize the importance of assessing one's personal and business situation, identifying motivations for selling, and assembling a team of experts, including investment banks and wealth advisors. They also stress the need for corporate hygiene, including getting financial records in order and addressing regulatory gaps. The hosts encourage listeners to ask themselves "why" and "what" questions, know their goals and motivations, and proactively prepare for the sale process.

Timestamps:

00:00 Introduction to the Private Equity Experience Podcast
00:34 Hosts' Personal Anecdotes and Fitness Talk
01:37 Preparing to Sell Your Business
03:27 Understanding Your Motivations and Goals
05:38 The Role of Investment Bankers
10:50 Assembling Your Advisory Team
19:53 Crafting Your Business Narrative
23:31 The Importance of Founder Self-Awareness
27:05 Managing Team Dynamics During Transition
33:40 Preparing for Due Diligence
34:22 Interviewing Investment Banks
36:09 Conclusion and Key Takeaways

==============================

🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

In this episode of PEX, the hosts explore the private equity selling process, comparing it to a dating game to illustrate the stages from initial teasers to detailed due diligence. They cover critical concepts like Confidential Information Memorandums (CIMs), virtual data rooms, and essential legal mechanisms such as drag and tag rights. Additionally, the discussion highlights the challenges founders face when adapting to new roles post-sale and offers practical insights into managing these transitions. Overall, the episode provides valuable guidance for navigating the intersection of entrepreneurship and private equity.

00:34 Host Banter

01:17 Reasons Founders Consider Selling

05:23 Understanding Drag and Tag Rights

12:47 Evaluating Private Equity Partnerships

17:52 Understanding the SIM Process

19:12 The Role of the CEO in Initial Meetings

20:10 Virtual Data Room and CFO Involvement

23:02 Navigating Private Equity Relationships

26:24 Challenges for Founders Post-Sale

==============================

🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory

In this episode, hosts Ed Barton, Rory Liebhart, and Emily Sander dive into the world of management fees in private equity. They discuss how PE firms make money, what founders and management teams need to know, and the importance of understanding management fees in deal negotiations.

Key Takeaways:

• Management fees are a crucial aspect of private equity investing, and understanding them is essential for founders and management teams.
• PE firms use various fee structures, including management fees, carried interest, and carried capital.
• Management fees can be a significant source of revenue for PE firms, but they can also be a major source of stress for founders and management teams.
• Understanding management fees is critical for navigating deal negotiations and ensuring a successful exit.

Actionable Tips:

• Founders and management teams should understand the management fee structure used by their PE firm.
• PE firms should be transparent about their management fee structures to ensure a smooth deal negotiation process.
• Understanding management fees is essential for navigating the complexities of private equity investing.

Timestamps:
00:34 Diving into Management Fees
02:56 Impact of COVID on Private Equity Funds
10:22 Current Market Challenges and Strategies
24:05 Navigating PE Firm Funding Challenges
25:48 Understanding Carry and Management Fees
29:36 Strategic Advice for PE Firms
34:35 Impact of Debt and Interest Rates

==============================

🎙 Podcast – Strategies, PE 101 & witty banter

📚 Book – On‑Ramp to Exit, full deal life cycle

🛠 Resources – Free templates, guides, tools

🔗 LinkedIn – Follow us for fresh PE insights

================================

Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

🔗Connect with Emily

🔗Connect with Rory