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Thinking about becoming the latest MSP to sell your business to private equity? Jordan and his team have hard-earned insider’s expertise in that area too.
“There’s a private equity playbook,” Jordan says. “If you’re curious, we can share more information on how it works and what they do.” Run the playbook yourself, he continues, and you may be able to capitalize your business without handing it over to someone else.
“I know a lot of the PE funds and they do wonderful things, but you can do it yourself,” Jordan says. “The benefit of doing it yourself is you keep all the money.”
Alternatively, he continues, you can borrow from a private equity fund instead of selling to it. “Most of the big private equity shops have a PE side, but they also have a credit side, and that’s a very underutilized side,” Jordan says.
Typically, he continues, a private equity firm will loan you money at 10 to 15 percent interest. Sounds crazy, he acknowledges, until you consider that their goal when buying companies is usually to collect a 30% annualized return on their investment.
“That’s a lot more than the 15% or the 10%, and so the difference if you go the debt route is you keep the spread if you create the value,” Jordan observes.
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