We are three years out and cannot decide whether to build our company to appeal to a strategic buyer or a private equity firm. How do these two buyer profiles look at our organizational structure, and how should it change who we hire today?

Question

Tyler Smith · Accepted Answer

Financial and strategic buyers look at your business through different lenses, and this affects how you structure your Accountability Chart. A private equity firm wants a turnkey platform with a fully functional leadership team that can operate independently. A strategic buyer, such as a larger competitor, often wants your customer list, proprietary technology, or market share, and they may plan to integrate your back-office operations into theirs.

If you are targeting financial buyers, you must hire heavy hitters for your leadership team today. They need to see a strong Chief Financial Officer and an experienced Integrator who can execute growth strategies without your guidance. The team must be capable of running the business on day one post-acquisition.

If you are targeting strategic buyers, focus your hiring on your front-line delivery, sales, and product development teams. Strategic buyers will look closely at your customer acquisition capabilities and technical talent, knowing they can eliminate redundant administrative roles later.

- For financial buyers, build out robust internal finance and human resources functions.
- For strategic buyers, invest in proprietary systems and scale your sales engine.

Decide on your target buyer profile early so you do not waste resources building departments that a future owner will simply dissolve.