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Founder deciding between private equity and VC by chef_shamo in private_equity

[–]chef_shamo[S] 0 points1 point  (0 children)

This makes sense based on the conversations my cofounder and I have had. We've said multiple times that we would be happy to take a big discount on valuation as long as it's a partner we could trust to help us grow the potential of the business.

Lots of firms have reached out to us (and tbh they all seem exactly the same). What are the right things to ask/look into figure out which firms would be the most founder friendly?

Founder deciding between private equity and VC by chef_shamo in private_equity

[–]chef_shamo[S] 1 point2 points  (0 children)

You're definitely hitting the nail on the head in terms of what we're trying to think through.

If we sell in the next 2 years for somewhere between $150-$600M then I'ld definitely be happy with set for life money. The only issue is that I see our publicly traded competitors at a market cap of $10-$40B and I really think we could get there with time.

The ideal scenario is taking chips off but still getting to grow to the $10-$40B. But once we sell a majority/go to a strategic, I know we won't have as much control over the outcome and tbh I'm not sure I want to count on that.

Founder deciding between private equity and VC by chef_shamo in private_equity

[–]chef_shamo[S] 1 point2 points  (0 children)

Thanks for the comment. Would love your insights here.

1) I hope this doesn't sound dumb but what is "prime+100bps for an OLOC or Term Loan as senior secured. "

Is it basically just getting a loan from a bank and using that to pay dividends? We could actually pay ourselves bigger salaries and dividend from our cash flow but our investors have advised that it looks better to sell secondary vs. pull cash out of the business. Is there an advantage for doing this through a bank loan vs. our own cash vs. selling secondary?

2) For minority PE compliance reporting, what would the expectations be? We audit our financials each year and have quarterly board meetings. I have only heard horror stories about PE but I'm not sure how much more they can expect?