Show Me More Than The Money
Family Business Leaders Who View Private Equity Firms Only As Funding Sources
May Miss Several Opportunities To Realize Their Firms’ Potential
by Joseph F. Trustey
Family businesses are faring better than many other sectors of the economy. But new data reveal that many companies are not quite as robust as their owners might think.
In raw financial terms, family-run enterprises are remarkably secure right now. At a time when corporate debt levels remain high, many family businesses carry almost no debt.According to the latest American Family Business Survey, average revenues have climbed 50% in the last five years, and almost two-thirds of business owners are very optimistic about their prospects. Many can and will self-fund some growth, and their owners therefore see little reason to bring in outside equity investors.
That’s where their perceptions may work against them.
When they look at private equity firms purely as sources of capital, for example, family business owners overlook golden opportunities to address limitations they may not fully recognize. They may also forfeit favorable ways of pushing their businesses to their full potential. Later in this article, we will look at five ways in which the right relationship with a private equity partner can make a lasting difference to a family firm’s vitality. More…
