Is a minority private equity deal right for your business?

Posted in: Raising finance


Is a minority private equity deal right for your business?

Is a minority private equity deal right for your business?

Minority private equity investment could be an option for entrepreneurs looking to access funds to de-risk and turbo charge growth, as they remain in control of their business and its day-to-day running.

Modern day private equity investment has been around since the mid-20th century and is nothing new, but, up until recently, minority investing has been a relatively small part of the investment scene.

However, in recent years, there has been a significant increase in the popularity of minority private equity deals i.e., entrepreneurs selling a non-controlling share (less than half) of their business to private investors in exchange for capital.

Ten years ago, around 9% of EMEA private equity deal value was minority, however, by 2021 the percentage had doubled to 19%(1) and this trend shows no signs of slowing.

Why are entrepreneurs increasingly exploring minority private equity deals?

In short, minority private equity deals allow entrepreneurs to enjoy most of the benefits of more ‘traditional’ majority private equity without giving up control of the businesses in which they have invested their blood, sweat and tears to grow.

It is a common dilemma that faces entrepreneurs who often have all of their value tied up in their business, having reinvested most of their profits in order to drive growth. Whilst they would welcome the opportunity to realise some of their value in their businesses and therefore ‘de-risk’, they are not ready to exit their businesses and miss out on the potential upside.

Private equity investors understand this dilemma and, in exchange for a minority equity stake in the business (less than 50%), can provide the funds so that shareholders can realise some of their value and/or funds can be injected into the business to turbo charge growth.

There is a common misconception amongst entrepreneurs that taking on private equity investment will result in them surrendering control of their business to an external investor. However, partnering with a minority investor allows entrepreneurs to remain in control of key decisions with the investor acting as a junior partner working alongside them.

The entrepreneur continues to drive business growth with the support of the investor, with the aim of maximising value on the eventual sale of the business when the time is right for the entrepreneur. This means that entrepreneurs enjoy more of the financial rewards of scaling up their businesses.

The growth of these types of deals is being driven by an increasing awareness amongst business owners of the “art of the possible” and an increasing number of private equity funds with specialist minority or growth capital funds set up to support these types of investments.

Track record

The Clearwater Growth team have helped a number of entrepreneurs to realise value in their businesses through partnering with private equity investors.

Take a look at a recent case study: Obsequio Groups investment from Beech Tree Private Equity.


  • Private Equity News: Time has never been better for minority investing (December 2022)

Authored by.

Tom Kaye

Associate Director

Having joined Clearwater International in 2021, I transitioned into the Clearwater Growth team to continue working with entrepreneur-led businesses which is my passion. Prior to Clearwater, I worked at a Leeds-based corporate finance boutique, Park Place Corporate Finance, where I advised on a range of transactions spanning multiple sectors.

The majority of my corporate finance career has been spent advising owner managers, so I’m really looking forward to working with some of the region’s most exciting, high-growth businesses to deliver exceptional outcomes as part of the Clearwater Growth team.

Outside of work I enjoy playing cricket which occupies the majority of my weekends during the summer.