Everything from valuation to investor alignment
Private equity remains an important source of capital for business growth, expansion, and ownership transitions, yet many business owners approach it without a clear understanding of how investors evaluate businesses or what preparation is required before entering a deal process.
Here are some key considerations for business owners:
Be selective about the investor you choose : Not all capital is equal. Beyond funding, private equity investors can influence strategy, operations, and long-term direction. Business owners should evaluate whether an investor brings relevant experience, industry knowledge, and value beyond capital.
Be realistic about how your business is valued : Valuation expectations often differ between owners and investors. While owners may be overly optimistic on their business’s current value and future potential, investors may be overly conservative when assessing both current results and future growth potential. Understanding this gap early can help avoid misalignment later in the process.
Be clear on why you are raising capital : Private equity can be a powerful tool for growth, expansion, succession, or liquidity, but it is not the right fit for every business need. Owners should fully understand what problem they are trying to solve and whether they need capital alone or a true investment partner. Before engaging investors, they should also be able to clearly explain what the business does, who it serves, what problem it solves, and how the company generates sustainable growth.
Be prepared for deeper investor scrutiny than most expect : Investors typically test the strength of a business through detailed questions around market size, financial projections, traction, and scalability. This includes how realistic growth assumptions are and whether the business can support its plans with data and execution.
Be aligned on expectations beyond the financial terms : Successful partnerships often depend on alignment between founders and investors on long-term goals, governance, and culture. Misalignment in these areas can create challenges even when the financial structure of a deal appears strong.
Taken together, these considerations reflect a broader reality in today’s private capital environment: businesses that are well-prepared and aligned with investors tend to be better positioned when raising capital or planning an eventual exit.
Through CFA Society Toronto, the world’s largest society of CFA Charterholders, business leaders can access a network of more than 11,500 investment professionals, corporate executives, and potential investor partners, helping bridge the gap between entrepreneurs seeking capital and investment professionals who can allocate it.
About Author
Steve Balaban, CFA, is a thought leader on private equity with experiences as an investor, advisor and award-winning lecturer. He is the Chief Investment Officer of Mink Capital where he advises, consults and educates family offices on how to invest in private equity. Due to the rising demand from family offices, financial institutions and service providers in private equity, he launched Mink Learning, a private equity education company that offers videos, resources and training to make the complex world of private equity simple.
Steve is also an award-winning lecturer at the University of Waterloo where he has created new courses on private equity, wealth management and the international course, a course that takes students to different areas of the world each year. His approach to education is unique as he uses innovative technologies and experiential teaching methods to explain concepts to his students. His passion for teaching resulted in being the only lecturer in the history of the University of Waterloo to win both the Distinguished Teaching Award (Steve Balaban – Distinguished Teaching Award) and the WUSA Excellence in Undergraduate Teaching Award in the same year.
In an effort to educate his students and the general public about private equity, Steve launched a one-of-a-kind Private Equity YouTube Channel to make the complex world of private equity simple. This channel has received over 1,500,000 views and counting: Steve Balaban – Private Equity YouTube Channel.
Steve is also a contributing author on the subject of private equity for the CFA Institute, he served on the Board of Directors for the CFA Society Toronto and currently serves on the Education Advisory Committee for the CFA Society Toronto.
Prior to Mink Capital and the University of Waterloo, Steve worked at Dunkley Capital where he invested in private equity, including a consolidation of billboard companies throughout Canada where he served as President of Stellar Outdoor Advertising.
Steve received a Bachelor of Mathematics from the University of Waterloo, where he graduated on the Dean’s List, and received an Honours Bachelor of Business Administration from Wilfrid Laurier University. He has also earned his Chartered Financial Analyst (CFA) designation.
Steve has extensive international experience. He has worked, studied and visited over 85 countries in every continent in the world.
