Wednesday, March 23, 2011

Private Equity Can Provide Business Families Options, Liquidity, and Transition

Families in Business have more options than many realize when they desire to grow, expand, or transition the family business and still maintain control and the family culture. As Aaron Aiken recently explained during an on-line seminar with The Network of Family Businesses, Private Equity firms can provide a business family with additional options.

Aaron Aiken is a Senior Associate in the San Francisco office of Hanover Partners, Inc. Hanover Partners is a Private Equity Investment company that partners with privately held and family owned businesses. One of their goals is to support, develop, and grow companies over the long term in partnership with management.

Several key points Aaron highlighted regarding what a Business Family should consider included:

1. A family in business needs to discuss their needs, goals, and objectives as a family and as a business. There are more options than many families in business may realize – there is more flexibility than selling or going public. And the family does not necessarily need to disrupt the family, non-family employees and culture of the family and business.

2. Private Equity firms have different strategies and cultures – take time to talk other families that have worked with that particular Private Equity firm – Do Your Homework – find a Private Equity firm that takes a "stewardship view" of your family business and values your family’s culture.

3. Be realistic about the valuation of your business. Know what your emotional attachment to the business really is - may not need to ‘auction’ to get the full value – don’t be too low in your valuation with a Private Equity firm – there are options for the transition and estate planning

As Aaron explained, “In some situations the owner of the company may not be willing to or financially able to take the financial risk alone. By working with a Private Equity investor, the owner can take some “chips off the table”, monetize a portion of the value of the company and then share the risk and reward of future growth with experienced investor partners”.

This seminar can be viewed in the archives of The Network of Family Businesses at

Wednesday, March 16, 2011


Frequently I will go back to my personal library and review or reread books that challenged my way of thinking or that made an impact in my life.

One of those books I revisited recently is Credibility by Jim Kouzes and Barry Posner. For me this book reinforces how personal leadership is and that at the end of the day, all leaders really have is their own integrity, honesty, principles and credibility.

One of the keys for me in building Credibility is putting my words into action.

The authors reframe the DWYSYWD or Do What You Say You Will Do


DWWSWWD or Do What We Say We Will Do

The ‘we’ is critical for me as an individual to build my credibility but also for me to lead my family and business.

Credibility – It will take time for me to earn it, I can lose it in an instant.

Hold me accountable to walk the talk.

How am I doing?

How are we doing?

Thursday, March 10, 2011


In the country side of Germany there is a castle dating back to medieval times. This castle, while not particularly interesting in structure, has a very unique history. The uniqueness of this castle is that the same family has retained title to the castle for several hundred years.

Credit for this feat was given to the fact that the family married intelligently, made good business decisions, and due to the fact that the family for centuries believed in working out their difficulties. The place to work out their problems was in one particular room in the castle. Adorning the wall on one side of the room was a rendition of a court jester and on the other side was a beautiful carved rose. There was great significance in these two symbols for anyone gathered in that room to “duke it out” or “work out” problems or issues.

In days of old, Court Jesters were permitted to say anything to the king without repercussion. While others in the court always held their tongues in front of the king, never wanting to confront or upset, the Court Jester was generally free to speak whatever he thought or felt.

A Rose is a symbol of “silence.” It reminded everyone that the conversations held in that room were private and not to leave the room.

By displaying these two symbols, the owners of the castle were subtly reminding everyone that they were free to speak their minds when meeting in this room to discuss the pertinent issues of the day, without repercussion, but the rose reminded them that whatever was said in that room, stayed in that room.

How would we function in a meeting with family members or the boss or the board if we knew we could speak our mind, as the court jester was allowed to do, but know that what said in that room would not leave that room.

Freedom to speak our mind (best done with grace and love) and respect to keep the discussion private.

A good motto for us as we work out issues in our families and our family business.

Wednesday, March 2, 2011

Family Business and Private Equity – Liquidity and Transition

In his White Paper with The Network of Family Businesses Aaron defines Private Equity and how a Business Family may utilize a Private Equity firm. Aaron stated, “While publicly traded companies are subject to federal securities laws and regulations as well as to daily scrutiny by financial analysts and the business media, companies owned by Private Equity buyout firms operate virtually free of quarter-to-quarter public accountability. This provides buyout firms with investment advantages such as flexibility, patience, and a long-term view that generally publicly traded companies do not enjoy.” Aiken also answers ‘Frequently Asked Questions’ about Private Equity in this White Paper.

The Network of Family Businesses has scheduled an on-line educational seminar with Aaron Aiken to discuss “Family Business and Private Equity – Liquidity and Transition” for Wednesday, March 16th at 11:00 AM EST.

Aaron Aiken is a Senior Associate in the San Francisco office of Hanover Partners, Inc. Hanover Partners is a Private Equity Investment company. They are experienced partners with privately held and family owned businesses. One of their goals is to support, develop, and grow companies over the long term in partnership with management.

Registration for the On-Line Educational Seminar, “Family Business and Private Equity – Liquidity and Transition”, is available at