Private equity (PE) can be a powerful partner for entrepreneurs looking to scale their business, unlock growth, or plan their exit. But choosing the right PE firm isn’t just about the check they’re willing to write—it’s about finding a partner whose strategy, culture, and approach align with your vision. That’s why engaging experienced bankers, like the team at Falcon Capital Partners, is critical. We help entrepreneurs like you ask the tough questions, evaluate responses critically, and ultimately maximize the value of your transaction.
Here’s a practical guide to vetting PE firms and ensuring you come out ahead.
PE firms may seem similar on the surface, but their DNA—their founding story, culture, and team—can vary dramatically. Some are hands-on operators, others are strictly financial engineers. You need to figure out who they are before you commit.
An experienced banker can uncover what’s under the hood, like whether they’re registered as a broker-dealer or if they rely on third parties for execution. We’ve seen entrepreneurs fall for the “A-team pitch” only to end up with the B-team running the show post-close. Don’t let that happen to you.
Questions to Ask:
Private equity isn’t one-size-fits-all. If the firm doesn’t know your space inside and out, you’re at risk of being treated like just another line item in their portfolio. You need a partner who speaks your industry’s language and knows the key trends, challenges, and valuation benchmarks.
Our team at Falcon has decades of experience in healthcare, technology, and business services, so we know how to separate fluff from real expertise. A good PE partner should be able to back up their industry claims with recent, relevant examples.
Questions to Ask:
Valuing a business isn’t just about plugging numbers into a spreadsheet. It’s about understanding the story behind those numbers: your growth potential, market position, and operational strengths. But don’t let a sky-high valuation blind you. What really matters is how much cash, stock or other “currency” you take home at closing.
PE firms often bake in working capital adjustments, escrow accounts, fees and earnouts that can erode your proceeds if you’re not careful. That’s where an experienced banker makes a world of difference. We negotiate these terms early and ensure you’re not leaving money on the table—or worse, giving it back later.
Questions to Ask:
The way a PE firm approaches the M&A process says a lot about how they operate. Are they strategic and thoughtful, or are they just running a cookie-cutter playbook? Do they prioritize confidentiality, or are they careless with sensitive information? Who are their deal advisors (CPA, Legal, Tech, etc.).
Having worked on both sides of transactions, we’ve seen a great deal. A strong PE partner should be able to explain exactly how they’ll grow your business and what their exit plans are 3-7 years down the road.
As mentioned, watch out for hidden fees—transaction fees, management fees, and monitoring fees can quietly chip away at your proceeds. At Falcon, we help you identify and push back on excessive charges.
Questions to Ask:
You wouldn’t hire an employee without checking their references, so why would you partner with a PE firm without looking into their history? Don’t just take their word for it—ask for proof. What’s their success rate? What deals didn’t go as planned, and why? Who can I talk to?
We’ve helped sellers spot red flags like clawback clauses, aggressive indemnities, preferences, or a habit of over-promising and under-delivering. A firm’s track record is a window into how they’ll treat you.
Questions to Ask:
At the end of the day, you’re looking for a partner, not just a check. The right PE firm will add value beyond dollars, whether through strategic guidance, operational expertise, or connections in your industry.
Falcon ensures you evaluate their long-term compatibility and post-close terms like equity rollovers and employment agreements. We’ve seen deals fall apart because of mismatched expectations on these fronts. Don’t let that be you.
Questions to Ask:
Choosing the right PE firm can feel overwhelming. That’s where we come in. At Falcon Capital Partners, we don’t just help you close a deal—we help you close the right deal. From navigating complex financial models and valuations to deal terms to, streamlining the M&A and diligence processes, and deal negotiations, we’re in your corner every step of the way. The goal is to maximize the value and the overall outcome.
With decades of experience and a relentless focus on our clients’ goals, we ensure you walk away with a partnership that aligns with your vision and maximizes your value. Let’s make your next chapter your best yet.
