PE-held ~7 years, near-sale fell apart — stay or walk?
I’m at a PE-backed company held ~7 years. We were very close to a sale last year, but the deal fell apart late due to employee equity treatment, not price.
Now the message is IPO-readiness, but realistically 2+ years out, and there’s no public filing yet. Many employee equity holders are effectively locked in — leaving means forfeiting meaningful upside.
For those who’ve been here before:
If you stayed through a delayed exit, did it pay off?
If you left, do you regret it?
Appreciate any real-world perspective.
I have not personally been in this position, but have spoken to dozens that have over the years. There is no right answer. It's 50-50 on regretting staying vs. regretting leaving.
Know a CFO that gave up a $15M payday by leaving 6 months too early. Know a CEO who wasted an extra 4 years and left after year 9 with no outcome.
You'll have to run the math on how much you're giving up, what opportunities you have in hand elsewhere, and the likelihood your equity outperforms elsewhere.
Nice response. What do you think the CFO missed?
That when a process breaks because the sponsor doesn't achieve their target bid price, the erratic managing partner will suddenly accept a similar offer 6 months later accepting that the deal was closer to a 2.0x instead of a 2.5x.
Wow. 9 years is painful. How often does PE hold that long? I'd think the LPs would be getting restless.
Unfortunately, at my age, I'm not currently considering other opportunities. Retirement is my next gig. Which makes this all the more painful.
At a MF, we have a portco we’ve been holding for close to 8 years. LPs aren’t thrilled, but they’re generally okay with it given the broader fund context we’ve returned north of a 2.5x net at the fund level, the company’s value has been compounding at a steady ~10% annually, and it represents 5% of total fund capital.
The original underwrite was obviously a ~5-year hold, but COVID and some business-specific disruptions pushed timelines. That said, LPs were relatively understanding given performance elsewhere in the portfolio and the fact that we’ve been well past IRR hurdles for a while.
At this point, the partners are comfortable letting it run, especially since a liquidity event is expected within the next 12–18 months. Any incremental value creation essentially drops straight to carry, and the LPs are aware of it.
Obviously this isn’t always the preferred outcome but just trying to give an anecdote
Happens a lot more than you think, even in assets that are performing well. Often it is fund level conditions that determine a sponsor's desperation to exit.
Maybe they have several other winners they can point to that will simplify their next fundraise. So the sponsor can optimize MoM for real carry dollars over IRR. It's usually the inverse where a good deal needs to exit too early to make up ground for poorer performers.
which industry?
Corporate IT / Enterprise Software
Interesting. I would stay at this stage imo assuming only other move is retirement
What do you mean by "the deal fell apart late due to employee equity treatment?" Not sure I'm following but understanding whether it was at all driven by company performance will be important before giving advice here. If performance is declining and the outlook isn't great, suggest looking at other opportunities. Otherwise you're potentially in for some tough years ahead and no guarantee that the company can rebound in time for the PE firm to realize a profit that would make your MIP worth something.
Some of this might depend on your status and reputation within the company and your relationship with both management & sponsor. If you are relatively senior, well thought of, liked and respected by mgmt and sponsor, there is potentially a path forward of you approaching them with your concerns and working out something compensation wise.
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