Private equity firms invest in established private companies, often buying a controlling stake, improving the business and selling it several years later. Family offices invest the wealth of one family and can be more flexible, backing anything from startups to real estate to mature companies.
Private equity (PE) usually means investing in companies that already have revenue and, often, profits. A PE firm might buy a majority stake in a family business whose owners want to retire, fund an acquisition strategy, or provide growth equity to expand a proven company.
Family offices manage the investments of a wealthy family. Because they invest their own capital rather than a fund with a fixed life, many can hold investments longer and move faster than institutional investors. PitchStreet lists private equity firms and family offices who describe what they invest in.
Common private equity deal types
- Buyouts: acquiring a majority or all of a company, often partly funded with debt
- Growth equity: a minority investment to fund expansion in a company that is already growing
- Recapitalization: letting owners take some money out while staying involved in the business
- Add-on acquisitions: buying smaller companies to combine with a business the firm already owns
What PE firms and family offices look for
Expect questions about revenue, profit (often measured as EBITDA), customer concentration, the management team, and how the business could grow over the next three to seven years. Clean financial statements, ideally reviewed or audited, make a large difference.
Family offices often care about fit with the family's interests and values as much as returns, and some prefer direct deals over investing through funds.
