Glossary
Private equity
Investment firms that use pooled funds to acquire stakes in private companies, grow them over a period of years and sell them for a return. Among the most active buyers and backers of agencies and marketing businesses.
In plain English
Private equity involvement in the agency sector usually takes the form of a buy-and-build platform: the fund backs a management team to acquire and combine businesses, then sells the group. Founders selling to such a platform are often offered a mix of cash and shares.
Private equity investors are analytical and process-driven. They value clean information, recurring revenue, growth and a credible plan, and they move quickly when those are in place.
Why it matters
Understanding how private equity thinks helps founders present their business and assess an offer, including the structure of any rollover equity and the fund's intended exit.
What to watch for
- Ask about the fund's timeline and how it expects to exit.
- Understand the equity structure and your position in it.
- Expect rigorous due diligence and a focus on quality of earnings.
Transaction language and legal treatment depend on the agreement and the jurisdiction. Written by Motion Advisory Partners as general guidance, not legal advice.