Should I Sell to Private Equity or Strategic Buyers? ft. Eric Wiklendt | Navigating Wealth - Navigating Wealth Recap
Podcast: Navigating Wealth
Published: 2026-01-21
Duration: 45 min
Summary
In this episode, Eric Wicklant from Speyside Equity discusses the decision-making process for founders considering selling their businesses, particularly whether to choose private equity or strategic buyers. He emphasizes the importance of understanding the exit strategy and the transformative approach of private equity firms.
What Happened
In today's episode of Navigating Wealth, hosts Tad Fallows and Sriram Golopally welcomed Eric Wicklant, a managing director at Speyside Equity. Eric shared his extensive experience in middle-market manufacturing private equity and discussed the crucial factors founders should consider when deciding between selling to private equity firms or strategic buyers. He highlighted that the choice depends on the founder's involvement post-sale and the specific goals they have for their business after the exit.
Eric outlined the three main exit pathways for founders: a full exit, a half exit where the founder remains involved for a transition period, and a continuation vehicle where the equity structure changes but the founder continues to run the business. He noted that at Speyside, they prioritize a collaborative approach, working closely with sellers to align the deal structure with their goals. This contrasts with many private equity firms, which often take a more transactional approach due to their backgrounds in investment banking rather than operational experience.
Key Insights
- Founders should clearly define their desired level of involvement post-sale.
- Speyside Equity takes a collaborative approach to deal-making, unlike many traditional private equity firms.
- Operational improvement and commercial growth are prioritized in Speyside's investment strategy.
- Understanding the differences in private equity firm backgrounds can impact the sale experience.
Key Questions Answered
What should founders consider when selling their business?
Founders need to think about their desired level of involvement post-sale, which can range from a full exit to a continuation vehicle. Eric Wicklant emphasizes the importance of being honest about what one wants from the situation, whether that's a complete departure or remaining involved for a transition period.
How does Speyside Equity differ from other private equity firms?
Speyside Equity distinguishes itself through its collaborative approach to investments, focusing on middle-market manufacturing. Eric points out that the firm is comprised of individuals with operational backgrounds, allowing them to offer a consultative experience rather than just a transactional one, which is common in many traditional private equity firms.
What are the main phases of value creation in a private equity investment?
Eric outlines that Speyside's approach to creating value is broken down into two main phases: operational improvement and commercial growth. Phase one focuses on enhancing EBITDA margin, while phase two aims at driving sales growth, ensuring a structured plan for value creation.
What challenges do founders face when transitioning to private equity?
One of the significant challenges for founders is the shift from a growth-focused mindset to one that emphasizes profitability and operational efficiency. Eric notes that many entrepreneurs are accustomed to prioritizing growth and may find the expectations of private equity surprising, especially if they have historically operated at a break-even level.
Why is understanding the background of private equity firms important?
Understanding the backgrounds of private equity firms can greatly influence the sale experience. Eric explains that many PE professionals come from investment banking, which leads to a more financially-driven, transactional approach, unlike Speyside, where the team has extensive operational experience that informs their strategy and execution.