Jack Killion has been a serial entrepreneur for 45 years and has raised private equity twice.Here are the pros and cons to taking private equity to grow your business.
The duo needed $500,000 to start the magazine and decided private equity was the best route to take. They made a deal with a magazine publisher in which it would invest half a million dollars for a 50% stake, and in return, Killion and his partners would help get one of the publisher's struggling magazines back on track.
"That was a strong relationship based on trust and friendship and shared interest," he said."Given a choice, you should always look for a strategic investment." Killion didn't have the money to buy his father's company back for a higher price, so he turned to a Wall Street investment-banking firm that agreed to put up a majority of the equity.The Wall Street firm reassigned an executive to comanage Killion's company, but he didn't want two captains running the ship. Killion left Killion Extruders that day, keeping his minority stake until a public company bought him out.