Everything An Entrepreneur Needs to Know About Selling to PE Firm

About the Episode

The world of private equity is often maligned and misunderstood. Adam Coffey brings his years of experience from the corporate and PE worlds to dispel the myths that surround the idea of selling a business to a PE firm. He shares stories from GE during its heyday under Jack Welch, discusses how he translates those lessons to the acquisitions, roll-ups, and turnarounds he has led, and talks about learning and the magic that private equity can bring to a company in helping it grow to the next level.

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In this Episode

1:29 How did Adam Coffey get into private equity (PE)?
4:11 Thoughts on Jack Welch of General Electric (GE) and his books.
7:44 How is the world of PE misunderstood?
9:45 Where does the perceived bad reputation of PE companies come from?
12:23 To what extent are PE players effective, being that they’re objective and have no sunk costs? And, to what extent does that impact the success of PE investments?
16:51 What are the most important tools in the Private Equity Toolkit?
20:25 What is the turnaround process like being that it is historically difficult to execute?
27:10 What’s the most difficult aspect of managing a roll-up?
31:20 What’s the most difficult part of the acquisition process on the buy side?
34:59 Advice to owners who are considering an exit in the next one to three years.
37:55 What is the likelihood that an entrepreneur can sell their business to a PE firm?
39:01 Adam Coffey’s most important lesson looking back at his career.

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Resources Mentioned

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Acronyms or Terms Used in This Episode

  • PE – private equity
  • YPO group (Young Presidents’ Organization) – a nonprofit organization that connects young presidents and CEOs with leaders at other large companies for mentorship
  • GE (General Electric) – with Jack Welch as Chairman and CEO of GE between 1981 and 2001
  • Q of E – the quality of earnings report
  • MOIC – multiple on invested capital

Meet Our Guest

Adam Coffey

Adam Coffey

Founding Partner of CEO Advisory Guru

Adam Coffey has a varied background, first as an Army veteran and then as an engineer before spending 10 years at GE during the Jack Welch era, then 21 years as a CEO building three national companies for nine PE sponsors. In 2021, Adam shifted to become the CEO at Advisory Guru, where he works with a dozen PE firms and more than 50 founders, as well as teaching seminars for global audiences.

Adam has had a total of 58 acquisitions completed with billions in exits and a 5x MOIC career batting average. He is also the author of two #1 bestselling books: The Private Equity Playbook and The Exit-Strategy Playbook. His third book, Empire Builder, is due out in the Fall of 2023.

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