An Insider's Take On Ultimate Software's $11 Billion Private Equity Takeover

. My read on the speech is that Rogers is simply arguing there are times when it makes sense for a firm to be public or private, and that different capital structures work at different stages in a company’s life cycle. Because it comes from a seller with a record of success, it holds more weight than a PE pitch deck that might make the same point. Also, private markets are now so flush with cash, take-private deals don’t necessarily fit the old mold of LBOs.

Then you look at your new checking account for your business and you say this is awesome, I'm never going to need money again. I have everything I need to start this great idea and live happily ever after. What happens next? You run out of money and you have to raise more money. No one ever thinks they are going to need more money. Almost every founder realizes they have to get more money. But that is OK.

So what is happening, you see the growth starting to decline and if you can pull off fifteen or eighteen percent growth at that size, it is incredibly impressive, and completely uninteresting to Wall Street. Guess what? Now the reality of Wall Street sets in. If you're not growing at a certain rate, then Wall Street says, well, then you better be making a whole lot of money. So now you're a company and you’re growing at a rate of about 15 percent, 18 percent.

Maybe they didn't realize that there's a new breed of private equity out there today, called growth equity. And this is what growth equity firms believe. Growth Equity firms invest in well-run, growing businesses with proven business models and solid management teams looking to continue driving the business. They look for businesses just like ours to do this very thing. So it's exciting. It really is. This is the type of partner that we're looking for.

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