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What to Expect When Selling Your Business to a Private Equity Group

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This story appears in the October 2015 issue of Entrepreneur. Subscribe »

Q: What should I expect when private equity starts sniffing around my company?

A: Expect to get put through the ringer. Selling to a private equity group (PEG) may be a great exit strategy for an owner who wants or needs to get substantial liquidity out of the business but wants to remain in operational control. Typically, PEGs will look to buy 80 percent of your firm's equity; the rest stays with you. When the PEG sells the company five to seven years later, your stake can be worth as much as what the PEG originally paid. (We call this the "second bite at the apple.")

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