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Private equity firms may vary in strategy, but they’re unified in what they value: clear growth stories, clean financials, and the absence of deal-killers.
That’s the consensus among several seasoned investment bankers who recently shared insights with Private Equity Info when we asked how they help sellers cut through the noise and speak the language of today’s private equity buyers. From surfacing key value drivers to managing risks, their responses reveal what really moves the needle.
Today’s expert advice comes from:
- Cam Bishop, Managing Director, Raincatcher
- Terry Fick, Managing Director & Principal, Corporate Finance Associates Worldwide
- Mark Bishop, Partner, ACP Capital Markets
Forget the “perfect” company—keep the story real
“In general, the investment thesis and list of required criteria that PE firms list in their deal search criteria are tantamount to finding a pink unicorn,” said Cam Bishop, Managing Director at Raincatcher. He said that firms often outline a long list of investment criteria that can be difficult for most sellers to fully match.
To address that, the team at Raincatcher asks well over 100 critical questions in the positioning phase, many relating to the company or owner's personal story, to pull out details that create a compelling narrative even if every aspect of the criteria isn't met.
Still, some thresholds are non-negotiable. He said that most PE firms avoid deals with high customer concentration, especially when one client represents more than 20% of total revenue, or 2-3 clients represent more than 40% of revenue. Gross margins below industry benchmarks are another red flag.
Lead with a real growth plan—backed by numbers, and people
“A well-defined growth plan that outlines clear goals, market strategies, and pathways for scaling is essential,” said Terry Fick, Managing Director & Principal at Corporate Finance Associates Worldwide. “Companies with a strong earnings history are viewed as lower risk and more likely to deliver expected returns," he said.
Fick also stresses the importance of leadership continuity. The best leader of that team is the current CEO, he said. “You should strongly consider a sale to PE when you want to stay and play for a while and get your second bite of the apple.”
Show them what makes the business defensible
Mark Bishop, a Partner at ACP Capital Markets, emphasizes that buyers are drawn to businesses that can clearly define their addressable market, articulate their approach, and demonstrate a revenue model with strong client stickiness. The most compelling companies are backed by real execution capability—not assumptions.
“We typically frame our client’s competitive advantages through outlining key value drivers,” said Bishop. “These include market size and market exploitation, barriers to entry like IP and regulatory approvals, customer stickiness, and the quality of the management team.”
Be honest about risk—and own the narrative
“We’ve found that the best policy with the PE community is to acknowledge risks and weaknesses up front,” Mark Bishop said. He recommends direct questions like: What keeps you up at night? What’s your greatest vulnerability? What’s your plan B and plan C if a major macro event hits?
Cam Bishop takes a similar approach at Raincatcher. “We work hard to understand the business in deep detail before we go to market,” he said. “If there are workarounds or solutions, we try to ethically offer facts and perspective.”
Don’t let common mistakes kill the deal
“There are many mistakes that business owners make prior to selling their companies,” said Cam Bishop. Among the worst: bad accounting, owner dependency, poor or inflated industry margins, vendor lock-in, and no second-tier management or succession plan.
Sometimes the issue is personal, especially when it comes to owners who show a lack of empathy or are hard to work with. “Many buyers will walk based on that trait or offer a steep pricing and terms discount to mitigate the risk and aggravation,” he said.
According to the experts, there’s no one formula for impressing private equity buyers. But what stands out are business leaders who know their numbers, understand their risks, and can clearly tell the story of where their business is headed next.
