@finascent: When a private equity (PE) firm buys a business, they usually keep the existing management team for a short transition period to ensure operations run smoothly and knowledge is passed on. However, if there are conflicting views or the team doesn’t align with the new strategy, the PE firm often replaces leadership with people they trust. They then typically add debt to the company’s balance sheet (a “leveraged buyout”), using borrowed money to finance the purchase. The idea is that the company’s future cash flows will pay down this debt while the PE firm works to streamline costs, restructure operations, and boost profitability. After several years, they aim to sell the company at a higher valuation (to another firm, investor, or via IPO) and capture the return on their investment. #financetok #finance #finascent #ib #investmentbanking #pe #privateequity #ny #money #motivation #fyp #viral
Finascent
Region: FR
Tuesday 19 August 2025 17:02:12 GMT
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CoconutCarrier47 :
Private equity is a cancer to society
2025-08-20 17:07:16
709
Lord Castro :
Private equity is the evil of capitalism and I’m a pro capitalist guy
2025-08-21 01:24:02
355
Tommy Devito :
Private equity just ruins business.
2025-08-21 09:28:17
152
JoeBjr :
As an operator and founder in my 8th Private Equity partnership, I will agree with the comment on debt. Otherwise if you are competent, strong and growing it is not hard to “manage” the Patagonia vest crowd. They need good business operators more than we need them. PE Funds are plentiful good leaders are not.
2025-08-21 00:01:02
55
ElGranRamos :
I don’t think that Private Equity should be allowed to buy a business using the subject business as collateral for the purchase. Again if a normal person wants to buy a business must go through hoops. Time to stop them
2025-08-21 10:08:10
21
coveragecobra :
Most corrupt industry. Going be the next 2008 housing bubble. Already starting to see this in certain sectors.
2025-08-20 20:29:01
106
user57555633570 :
I work in private equity I hope to have my own firm u literally just learn how to print
2025-08-21 09:42:17
1
Jans :
If it isn’t a family business or a business you don’t care to pass down or it be your legacy the best thing you can do is take the big check, keep collecting a check till they boot you, then live the rest of your life like a king… take absolutely 0 stock in that business as they will drive it to the ground then sell it for parts
2025-08-21 01:41:06
5
8a🇺🇸🇸🇻 :
Private equity is literally operating like a virus.
2025-08-21 07:57:34
17
Jeff Niebuhr :
This would be better with louder music
2025-08-20 21:02:50
26
HornySloth :
My accounting firm was sold to private equity in January. No changes so far. We were given MIPP units to stay (only managers and above). A lot of gay culture meetings so far and a push for more consistent billings. Prolly due to cash requirements to monthly distributions to PE firm.
2025-08-21 01:28:13
5
Utarimuo :
I need clarity on why private equity will take on debt and put the tab on the new business they bought. So they buy with borrowed money?
2025-09-24 21:28:57
2
czpac :
PE is where America goes to die! They cut costs, increase margins and sell at a 10x
2025-09-03 12:41:16
4
Primo :
They rip out all the assets loaded up with debt and drive it into the ground! Explain, red lobster, Joann fabrics. There was a host of other companies that they’ve done this to. Very few biome to turn around the business to make it profitable and then sell it off.
2025-08-21 01:35:26
24
mike :
P.E. learned that move from what Paulie did to that one restaurant in Goodfellas
2025-08-21 16:05:59
0
frak357 :
If you sell your business you no longer have a say on how that business should operate. Live with that or don’t sell.. 😏
2025-08-21 04:20:45
4
Greg Zoller :
If I ever sold a business I want to negotiate my (short) runway. Once I get my check I don’t want to be there any longer than I have to. I don’t suffer sharing power.
2025-08-21 05:21:12
6
jasonh20071 :
This is so true. And then the run it to the ground and sell it off in pieces
2025-08-21 01:00:24
4
IDSIA :
mixture of profit maximization, lending & dividend distribution WHILE being in debt is the mixture of death.
2025-09-11 04:02:51
1
KH :
Keep some share for long-term value.. take your money and start all over again while you still have some cash aside to keep your head up
2025-10-07 11:24:28
1
Road to IB :
Acquire + Shutter
2025-10-08 22:10:25
1
CryptoMilliVanilli :
This is why you retain 60% of the company. You pocket the 40% and invest it. Stick around for as long as you want to. Once you're comfortable with handing over the keys you can do that. Or you learn to let go and go build something else with the money. Exit strategy is how you become a billionaire.
2025-09-13 15:32:35
1
notiflyy :
My advice is if you are CEO or in the important, just focus on being the best person you can be, focus on adding the most value!
2025-08-25 16:39:00
1
Tony :
Debt killed many companies. Private equity killed Edcon in South Africa with debt.
2025-09-11 16:53:09
1
teddynovak :
Why bother training them? They’re just going to gut the company, load it with debt and bankrupt it.
2025-08-21 13:47:11
1
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