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

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

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For all investment related enquiries, please introduce yourself via e-mail or the provided form.

For all investment related enquiries, please introduce yourself via email or the provide online form.