Comments on: Stay clear of single-owner private equity firms http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/ A vignette into the aberrant thoughts of a private equiteer Fri, 30 Jul 2010 12:08:39 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Working for a mega-fund vs. mid-market fund | Ambition Magazine http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/comment-page-1/#comment-7285 Working for a mega-fund vs. mid-market fund | Ambition Magazine Fri, 30 Jul 2010 12:08:15 +0000 http://www.theprivateequiteer.com/?p=1797#comment-7285 [...] You can do the sums to work out the management fee income to work out if they’re running on fumes or flush with cash; there’s a lot to be said for frugality, but it can be downright dispiriting having to pay for your own gas to drive out to investees (trust me, it happens, especially in single-owner firms) [...] [...] You can do the sums to work out the management fee income to work out if they’re running on fumes or flush with cash; there’s a lot to be said for frugality, but it can be downright dispiriting having to pay for your own gas to drive out to investees (trust me, it happens, especially in single-owner firms) [...]

]]> By: Top 5 posts by traffic for 2009… and an intro into 2010 | A Private Equity Blog http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/comment-page-1/#comment-7175 Top 5 posts by traffic for 2009… and an intro into 2010 | A Private Equity Blog Mon, 15 Feb 2010 01:09:48 +0000 http://www.theprivateequiteer.com/?p=1797#comment-7175 [...] Stay clear of single-owner private equity firms – not such a big surprise; somewhat controversial [...] [...] Stay clear of single-owner private equity firms – not such a big surprise; somewhat controversial [...]

]]> By: A look at a sample of private equiteers | A Private Equity Blog http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/comment-page-1/#comment-7151 A look at a sample of private equiteers | A Private Equity Blog Mon, 25 Jan 2010 03:01:28 +0000 http://www.theprivateequiteer.com/?p=1797#comment-7151 [...] most popular post, Stay Clear of Single-Owner PE Firms, received 1000+ visitors in just a few [...] [...] most popular post, Stay Clear of Single-Owner PE Firms, received 1000+ visitors in just a few [...]

]]> By: Working for a mega-fund vs. mid-market fund | A Private Equity Blog http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/comment-page-1/#comment-7127 Working for a mega-fund vs. mid-market fund | A Private Equity Blog Sun, 17 Jan 2010 04:09:46 +0000 http://www.theprivateequiteer.com/?p=1797#comment-7127 [...] You can do the sums to work out the management fee income to work out if they’re running on fumes or flush with cash; there’s a lot to be said for frugality, but it can be downright dispiriting having to pay for your own gas to drive out to investees (trust me, it happens, especially in single-owner firms) [...] [...] You can do the sums to work out the management fee income to work out if they’re running on fumes or flush with cash; there’s a lot to be said for frugality, but it can be downright dispiriting having to pay for your own gas to drive out to investees (trust me, it happens, especially in single-owner firms) [...]

]]> By: Congrats and thanks to Erin Griffith from peHub | A Private Equity Blog http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/comment-page-1/#comment-4903 Congrats and thanks to Erin Griffith from peHub | A Private Equity Blog Fri, 23 Oct 2009 04:57:17 +0000 http://www.theprivateequiteer.com/?p=1797#comment-4903 [...] random fact… her comments about my post, Stay clear of single-owner private equity firms, caused a 19x increase in traffic for that day (08 July 2009). Which, coincidentally, is the [...] [...] random fact… her comments about my post, Stay clear of single-owner private equity firms, caused a 19x increase in traffic for that day (08 July 2009). Which, coincidentally, is the [...]

]]> By: JVC http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/comment-page-1/#comment-3516 JVC Tue, 07 Jul 2009 15:01:30 +0000 http://www.theprivateequiteer.com/?p=1797#comment-3516 Your article is interesting but fails to demonstrate the differences between a smaller PE shop and a larger one. My experience has shown me that most smaller PE firms (1-3 partners) are controlled in very much the same way as larger PE firms with little to no equity going to the supporting cast. This lack of equity sharing is likely the major reason many PE pros leave their firms, be they large or small, to go on their own - money. Then what do they do when on their own? They of course set up the same top heavy, little sharing structure they came from, but to their benefit. There are numerous examples of this all over the US where this has happened. As to your points on risks of a single owner - I agree with the caveat being that these risks exist at all firms no matter the size. Most firms are run by 1-2 'name' partners who run the show. If they go away, so goes the firm. Your article is interesting but fails to demonstrate the differences between a smaller PE shop and a larger one. My experience has shown me that most smaller PE firms (1-3 partners) are controlled in very much the same way as larger PE firms with little to no equity going to the supporting cast. This lack of equity sharing is likely the major reason many PE pros leave their firms, be they large or small, to go on their own – money. Then what do they do when on their own? They of course set up the same top heavy, little sharing structure they came from, but to their benefit. There are numerous examples of this all over the US where this has happened.

As to your points on risks of a single owner – I agree with the caveat being that these risks exist at all firms no matter the size. Most firms are run by 1-2 ‘name’ partners who run the show. If they go away, so goes the firm.

]]> By: The Private Equiteer http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/comment-page-1/#comment-3511 The Private Equiteer Fri, 03 Jul 2009 11:01:47 +0000 http://www.theprivateequiteer.com/?p=1797#comment-3511 Thank you for the feedback/questions. My "observations" are somewhat stereotypical; I'm sure there are great one-man shops out there and terrible multi-owner shops. The problems I mentioned tend to be concentrated to one-man shops, but there's no reason they don't apply to two- or three-man shops if they share the same characteristics. Conceivably, a two-man shop could share the same issues if the two owners had the characteristics of one. As for those working in one-man shops, please don't take this post too seriously. If you're having a great time and learning a lot, then keep the momentum going. There are some truly great and kind people out there with a lot of humility to boot. You don't need to work for two or three of these people; one of them will be much more valuable than 10 of your average PE managers. However, if the points I mentioned are really hitting home and you're suffering at the hands of a one-man firm, then maybe it's time to give your future some thought. There's no reason to be trapped by "the machine"; we all deserve to spend those 60, 70 or 80 hours a week with at least some enjoyment and sense of self-worth. TPE Thank you for the feedback/questions.

My “observations” are somewhat stereotypical; I’m sure there are great one-man shops out there and terrible multi-owner shops. The problems I mentioned tend to be concentrated to one-man shops, but there’s no reason they don’t apply to two- or three-man shops if they share the same characteristics. Conceivably, a two-man shop could share the same issues if the two owners had the characteristics of one.

As for those working in one-man shops, please don’t take this post too seriously. If you’re having a great time and learning a lot, then keep the momentum going. There are some truly great and kind people out there with a lot of humility to boot. You don’t need to work for two or three of these people; one of them will be much more valuable than 10 of your average PE managers. However, if the points I mentioned are really hitting home and you’re suffering at the hands of a one-man firm, then maybe it’s time to give your future some thought. There’s no reason to be trapped by “the machine”; we all deserve to spend those 60, 70 or 80 hours a week with at least some enjoyment and sense of self-worth.

TPE

]]> By: e http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/comment-page-1/#comment-3510 e Fri, 03 Jul 2009 00:11:50 +0000 http://www.theprivateequiteer.com/?p=1797#comment-3510 Interesting - do you only think that this applies exclusively to single owner firms or also to two owner firms? Interesting – do you only think that this applies exclusively to single owner firms or also to two owner firms?

]]> By: al-d http://www.theprivateequiteer.com/stay-clear-of-single-owner-private-equity-firms/comment-page-1/#comment-3509 al-d Thu, 02 Jul 2009 23:30:48 +0000 http://www.theprivateequiteer.com/?p=1797#comment-3509 I wish you had written this before I accepted my job offer. This market is tough, what would you advise a young equiteer who works for one of these "one-man" PE firms? I wish you had written this before I accepted my job offer. This market is tough, what would you advise a young equiteer who works for one of these “one-man” PE firms?

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