When Partnering with Private Equity - Three Questions from a Founder

Joseph Scaretta & Moses Carrasco - Co-CEOs & Founders of MasonMade Ventures

As the Co-CEO of MasonMade and a three-time founder with two private equity (PE) exits, Joseph Scaretta understands that there are many questions to explore when considering a private equity partnership, acquisition, or buyout. Here are three questions that he recommends thinking about deeply before accepting private equity partnership or funding.

1. How does the private equity firm align with my company’s vision and values?

As a founder, you have built your company from the ground up – the countless hours, the scarifies, and the milestone moments – you will carry those memories with you. It’s also important to know though whether the vision – your unique plan for the company – will carry on. You want to understand whether the PE firm will align with your company’s vision and its values and understand their typical investment including their time horizon and exit strategy.

2. How will this transaction affect our people – in other words, will this investment elevate my team?

As a founder, you have most likely hand-picked the people whom you have worked with side-by-side over the years. You know that much of your company’s success could be attributed to the talent of your team. When accepting a PE investment, consider whether the firm will enhance your team’s talent through professional development opportunities. Explore whether your team will have mobility within the company and in the portfolio companies of the firm.

3. How will this investment affect me emotionally?

Joe and his business partner Moses Carrasco found that they were affected differently during each of their two PE exits. During their first exit, they weren’t fully prepared for the changes that happened – nor did they know the level of change to expect. With their second PE exit, they understood the process and knew that change was inevitable. If you are seeking a private equity exit, you must know that change will occur. The level and intensity of organizational change will vary based upon the firm’s investment philosophy. At MasonMade Ventures, we focus on a Co-CEO model and look to elevate the talent of our portfolio companies.