Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
It depends on the company. I wouldn't be inherently scared away by the ownership structure of it.
Companies owned by an entity disconnected from and disinterested in the core efforts and never looking at anything but the bottom line are never going to be a satisfying place to work.
There many be situations where a holding company is experienced and committed in a particular field and only acquires companies within that field, but there seem to be far more where the VC/PE company chooses its investments on no more and no less than profitability; they will never care about the products or services or operation or anything as long as the profits are maximized (and stock value high, if relevant).
Nothing about working there will have much to do with, well, what they do. Every decision will have to start and end with its short-term impact on profit.
I guess if the fattest possible paycheck at any cost is your goal, they're a good choice.
You have very marketable skills and experience. If the job sounds interesting and the pay is good, take it, but go in with your eyes open, and don't expect to stay longer than a few years. I worked for a company that was taken over by PE. They loaded the company down with debt, and then brought in new management every other year as our sales tanked. Our department was reorganized 7 times in 6 years and a lot of people were let go. PE is far more ruthless in running a business because they are under extreme pressure to increase profit and flip the company for a profit. They ended up running our company into chapter 11 bankruptcy.
ISTM the OP was asking about Private Equity firms like Bain Capital, Platinum Equities, KKR and others https://en.wikipedia.org/wiki/Private_equity_firm. Not shareholder owned "public" businesses, which as you say, have their own problems.
My take, having been subject to 2 takeovers by a PE outfit, is the risk that the PE has no real interest in keeping the owned co. in business. They load it with debt, and pay themselves big bonuses. Then either dissolve the co, or sell off the remains to some other PE firm.
Yep, I work for a company that sold out to a PE firm over a year ago. All they are doing is making us look good on paper and then they are going to flip us. They have raised prices through the roof, cut staff to about a 1/3 of what it was, cut bonuses and raises, and generally are running the company very thin.
We all see the handwriting on the wall, they have no desire to grow the company, just to make it seem profitable, and then find a buyer. They are not in it for the long haul, they admit probably 5 years or less.
Yep, I work for a company that sold out to a PE firm over a year ago. All they are doing is making us look good on paper and then they are going to flip us. They have raised prices through the roof, cut staff to about a 1/3 of what it was, cut bonuses and raises, and generally are running the company very thin.
We all see the handwriting on the wall, they have no desire to grow the company, just to make it seem profitable, and then find a buyer. They are not in it for the long haul, they admit probably 5 years or less.
Seems to be the status quo in USA now is to buy, trim lean muscle (there's no fat left) and re-sell to the next idiot buyer.
I would PREFER to work for a company owned privately than traded publicly. The privately owned companies tend to be more long term oriented while the management of the publicly traded firms are nothing but daily stock ticker watchers.
There are private equity firms that are short termed oriented and long term oriented. The long term oriented ones are better to work for. Short term oriented ones are not better than the daily stock ticker watcher companies.
Companies owned by an entity disconnected from and disinterested in the core efforts and never looking at anything but the bottom line are never going to be a satisfying place to work.
There many be situations where a holding company is experienced and committed in a particular field and only acquires companies within that field, but there seem to be far more where the VC/PE company chooses its investments on no more and no less than profitability; they will never care about the products or services or operation or anything as long as the profits are maximized (and stock value high, if relevant).
Nothing about working there will have much to do with, well, what they do. Every decision will have to start and end with its short-term impact on profit.
I guess if the fattest possible paycheck at any cost is your goal, they're a good choice.
The same is kind of true of a publicly traded company, isn't it?
I think it depends on the company and why the PE firm was involved in the first place. If its functionally a dying ship, then one can reasonably expect that it won't be pretty. An easy example would be a declining old school retailer.
Other examples might be something like Trinseo. Trinseo was part of Dow Chemical when Dow decided to refocus, and sold some ancillary divisions off. Bain bought their Styron division, and got it running as its own profitable company, nd went public.
My point is that sometimes, it can have the same benefits that a privately held company has; namely it sometimes allows for a company to refocus on getting righted and profitable without being beholden to shareholders, with the idea that the VC makes out at the IPO.
PE firms do one thing and one thing only. They buy distressed companies, usually with leveraged debt, cut costs to shore up profits, and aim for a multiple on the sale in 3-5 years. They will take multiple paths to do this, ranging form consolidation of portfolio companies to shared services to closing down unprofitable products and divisions. They are almost never focused on long-term growth - just getting the equity worth as much as possible before a sale.
If that is what you want to be a part of, that is what you can expect. If not, you're gonna have a bad time.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
