Management Buyout vs. Private Equity – Understand Your Options
Should you consider a Management Buyout from within your company? Or go with external Private Equity, Strategic buyers or a Founder Investor? There are pros and cons with each approach, and the more time you allow to consider your options, the better placed you’ll be to make a decision that’s right for your company.
Teoh Capital is a private, family-owned investment firm. We acquire and hold software and technology businesses. We won’t sell your company to a rival. We take care of your employees, your brands, your products and services and your customers.
When we buy a company, we keep disruption to a minimum. Our focus is on our companies retaining business autonomy while we inject the capital they need for growth. Our experienced, global network of top talent is available to offer expert advice during all the phases ahead.
How are we different?
Our flexible capital enables founders to maximise proceeds via a two-stage exit, while retaining operational autonomy and benefiting from ongoing, direct access to our founder-investor, David Teoh. In practice, this means we offer ‘capital out’ options for founders to immediately realise the value of what they have built, but we also support them to retain the upside value from the growth capital that we invest to accelerate the growth and value of the business.
Private equity (Read more about “how private equity works” here) can also offer a two-stage exit to founders and investors (where this is an objective), Teoh Capital’s difference is to invest without a fixed time horizon.”. Due to fund structures and management fees, private equity and venture capital funds have a limited time horizon that may not align with the growth lifecycle of a company. Unlike those investors, we are not distracted by exit plans a year or two after a transaction.
Similar to venture capital investors, we can invest growth equity to accelerate growth and increase the value of the business and its impact on industries, however, we unlike venture capital (read more about PE vs. VC here), we provide founders ‘capital out’ so that they can de-risk upfront.
Finally, one of our key points of difference is the continuous and direct access that our investees get to our founder-investor, David Teoh and our investment team. We have unparalleled pedigree in founding, operating and growing software and technology businesses and can draw from decades of experience.
Comparison of Teoh Capital to other sources of capital
|Teoh Capital||Private Equity||Venture Capital||Trade / Corporate Buyer|
|Capital out – vendors can realise value|
|Capital in – growth equity into companies|
|Vendors maximise proceeds via 2-stage exit while de-risking today|
|Company management retain operational continuity|
|Material, dedicated operational input – not just ‘support’|
|Direct, local access to founder-investor|
|Streamlined, single-layer and agile investment decision making|
Finding investors for your business can be a daunting task. From meeting with potential backers, to preparing pitch decks and expanding your professional network, there is a lot to consider. Whether you’re in the early stages of a new business, you’ve hit a plateau in growth, or you’re seeking outside...
Private Equity (PE) and Venture Capital (VC) are two channels of investment that are often (incorrectly) used to describe private capital investments into companies at various stages of their business lifecycle. However, in spite of the confusion that exists, there are some very stark differences between private...
Private equity firms invest in companies to enhance their value and improve their prospects for capital growth. Many firms invest in growing businesses and long-standing brands, but one often overlooked investment target is family businesses. Family businesses run with long-term intentions and a strong...