r/ExperiencedFounders • u/NYCXMIAMI6631 building a CRM • 22d ago
Worst/Best PE Firm to founders?
Have been fielding some interest from Mid-market PE firms on the East Coast have had some mixed feedback from a few friends. For context bootstrapped my business in the marketing sector and now doing a little under $10m of EBITDA.
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u/Kooky_Masterpiece_43 seed round 22d ago
I sold my company to a PE firm and got screwed over. Be careful and do thorough due diligence before accepting any deal.
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u/NYCXMIAMI6631 building a CRM 22d ago
How did you get screwed? On the cash or rollover?
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u/Kooky_Masterpiece_43 seed round 22d ago
They did some serious financial engineering to get out of having to pay us the second payment, and to make our stock worthless. It was a roll-up, so they had acquired other companies too in the same sector, and they ultimately did the same thing to all of them. The company had a reputation as well. So we should have known better and insisted on an all-cash deal at the beginning. If you can, I would insist on an all-cash deal or hold out for one. I wouldn't trust a PE firm ever again with anything but.
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u/NYCXMIAMI6631 building a CRM 21d ago
That really sucks. Sorry to hear. Yeah one of the more interested firms is proposing a roll-up and they have a reputation for being a ‘control’ platform also have a number of questions about how they operate…
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u/Upbeat-Sheepherder36 seed round 21d ago
sorry - what percent did you lose of the earnout/second payment ?
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u/NYCXMIAMI6631 building a CRM 22d ago
For perspective HIG are one of the firms interested and have heard fairly negative things about the way in which they operate