Private equity vs. a growth partner for your painting company
Private equity has discovered the trades, and painting companies are getting calls. A growth partner is a different kind of buyer with a different deal. Here’s an honest look at both, so you can pick the one that fits what you want.
- Private equity is built to buy, grow and sell again within a set time. A growth partner is built to own and operate.
- PE can be the right call if you want a big check, a clean exit and you’re fine with the business being sold again.
- A partner can be the right call if you want to stay involved, keep your brand and team, or sell only part of the company.
- Look past the price: control, your role, what happens to your people, and how you actually get paid matter as much.
- Ask every buyer the same hard questions, and talk to owners who already sold to them.
Two very different kinds of buyers
Private equity firms raise money from investors into a fund, use it (often along with debt) to buy companies, work to grow their value, and then sell them to return money to those investors. In the trades, a common play is the roll-up: buy a “platform” company, add more companies to it, and sell the combined business later.
A growth partner, sometimes called an operator-partner, invests in a company and then works inside it: leadership, systems, recruiting, finance, marketing. Some take a minority stake, some a majority, some buy the whole company. The good ones plan to own the business for the long haul and make their money from its profit, not from flipping it.
Neither is good or bad on its own. They’re built for different goals. The trick is matching the buyer to yours.
Private equity vs. a growth partner, side by side
Every firm is different, so treat this as the typical shape of each, not a promise about any one buyer. Where we describe a growth partner specifically, we use Aleph, because that’s the model we know.
| Private equity (typical) | Growth partner (Aleph as the example) | |
|---|---|---|
| Who they are | A fund managed for outside investors, often buying several companies in a trade | An operator that invests in, builds and buys painting companies, and works inside them |
| What they want | Grow the company’s value and sell it at a gain | Scale and stabilize healthy profit for many years |
| Hold period | Typically a fixed hold period, with an exit horizon set by the fund | Buy-and-hold, no exit clock |
| How much they buy | Usually a majority or all of the company | Minority (40–49%), majority (typically 81% for businesses over $4M), or a full exit |
| Control | Usually the buyer’s board and management call the big shots | Joint ventures are “manager managed,” with the founder named as manager |
| How they work with you | Varies; often oversight, reporting and targets | Embeds with your team: weekly one-on-ones, team meetings, field coaching, financial trending |
| Your team and brand | Depends on the plan; brands may be kept or merged into the platform | The goal is a durable business with a vested leadership team |
| How you get paid | Cash at close, often plus rollover equity, earnouts or seller notes; a second payout if your rollover gains when the platform sells | A compensation plan for the role you play (commonly a six-figure income before distributions) plus yearly distributions of net income; a buyout for a full exit |
| How they make money | Mostly from selling the company for more than they paid | The same way the founding partner does: compensation for the work and distributions of net income |
When private equity is the right call
Be honest with yourself here. Private equity is a good fit for a lot of owners:
- You want a clean exit and a large share of cash up front. PE firms have capital and are used to writing meaningful checks at close.
- You’re comfortable with the business being sold again. If what happens after your transition doesn’t weigh on you, the hold period isn’t a problem.
- You like the idea of a “second bite.” If you roll some equity into a growing platform, you may get a second payday when it sells. That can be meaningful, though it isn’t guaranteed.
- You want to be part of a bigger company. Some owners enjoy the scale, buying power and career paths a large platform can offer their people.
- You have a strong management team already. A business that runs without you is easier to hand over to a buyer that won’t be in the field with you.
The things to watch: earnouts tied to targets you may not fully control, debt the platform takes on, cost cuts made to hit a number, and how your role and your people change after closing.
When a growth partner is the right call
- You’re tired, not finished. You want help carrying the load and someone to fill the seats you can’t afford alone yet, like a CFO, a COO or a recruiting team.
- You want to keep control. A minority partnership lets you keep the majority position and run the business.
- You want to change your role, not leave. A majority partnership lets you step back from running everything while staying part of the next chapter.
- Your people and your name matter. A buyer who plans to hold the business has every reason to keep the team and the brand strong.
- Your business isn’t “sale-ready” yet. If it still runs through you, a partner who builds the management team with you can raise its stability before any full exit.
The things to watch: you’re signing up for a long relationship, so the fit with the people matters a great deal. Understand exactly how decisions get made, how the partner gets paid, and what your compensation and distributions will look like. A partnership usually pays you over time rather than in one large check.
Not sure how “sale-ready” your company is? Get your free Value Score, or score yourself on the five stability factors in the Stability Scorecard.
Questions to ask any buyer
Whoever you talk to, ask the same questions and compare the answers:
- How long do you plan to own my company, and what happens at the end of that?
- How much of the price is paid at close, and how much later? What has to happen for me to get the rest?
- Who makes decisions after the deal: about pricing, hiring, budgets, my role?
- What will my role be, for how long, and how will I be paid for it?
- What happens to my team, my office, my trucks and my brand name?
- Will the company take on debt as part of this deal or after it?
- How do you make money from this? When do you win, and can you win if I don’t?
- What will you actually do in the business week to week?
- Can I talk to three owners who sold to you, including one where it didn’t go well?
- Can I visit companies you already own?
Then take the answers, and the term sheet, to your CPA and an M&A attorney. Deal structure and taxes vary a lot from one offer to the next.
Where Aleph fits
Aleph is the anti–private equity partner for painting companies. Typical private equity buys to extract and exit; we buy to build, and we stay. We invest capital and leadership to scale, embed with your team and do the work, and only win when you win. We make money the same way our partners do: through compensation for the time, energy and resources we supply, and through distributions of the business’s net income.
You choose how far: a minority stake (40–49%) where you keep control, a majority partnership (typically 81% for businesses over $4M, to remove all personal liability from the legacy owner), or a full exit into good hands. Read more on how it works and selling your painting business, see the full picture in how to sell a painting business, or get started when you’re ready to talk.
How valuable is your painting company today?
Answer a few questions about margin, profit, team and reputation and get your Value Score: how your business measures up on the five things that make a painting company worth owning, and what would raise it.
Common questions
Is private equity buying painting companies?
Yes. Private equity firms and the companies they back have been buying businesses across home services, including painting. Many use a roll-up model: buy a platform company, add others, and sell the combined business later.
What happens after private equity buys a painting company?
It depends on the firm, but typically the company joins a larger platform, works to growth and profit targets, and is sold again at the end of the fund’s hold period. Your role, your brand and your team may change. Ask any buyer directly.
What is a growth partner?
An investor that takes a stake in your company and then works inside it, adding leadership, systems and capital, with the aim of owning it for the long term. Aleph is one example: a buy-and-hold partner with no exit clock.
What is a “second bite of the apple”?
When you sell most of your company but keep (roll over) some equity, then get a second payout when the business is sold again later. It can be valuable, but it isn’t guaranteed and depends on how the business performs.
Do I keep control if I partner with Aleph?
In a minority partnership (40–49%) you keep the majority position and managerial control. Aleph’s joint ventures are set up as “manager managed” entities with the founding partner named as the manager.
How do I know if my painting company is ready for either?
Start with stability: a team that runs without you, gross margin of 40% or more, and net profit of 15% or more. The free Value Score shows where you stand in a few minutes.
Let’s build something durable.
If you’ve built a great brand and a durable team, we should talk. No exit clock. No strip-and-flip. Just partners who yoke up and stay.