Private equity firms are not simply buying growth. They are underwriting risk, durability, and future upside.

Predictable Cash Flow Comes First

At the core of most private equity investments is predictable, repeatable cash flow.

Buyers look closely at:

• Revenue consistency and growth trends
• Margin stability over time
• Customer retention and repeat purchasing behavior
• Exposure to volatility from platforms, suppliers, or paid acquisition

Businesses with clear, reliable cash flow profiles are easier to underwrite and often attract stronger interest.

Clear Paths to Scalability

Private equity firms invest with a value creation plan in mind. They want to understand how the business can grow under new ownership.

Common growth levers include:

• Expanding product lines or services
• Entering new channels or geographies
• Improving operational efficiency
• Strengthening data and marketing infrastructure

Founders who can clearly articulate these opportunities help buyers build conviction in the investment.

Management Team Depth Matters

A capable management team is often a deciding factor in private equity acquisitions.

Buyers evaluate:

• Leadership depth beyond the founder
• The team’s ability to operate independently post-transaction
• Willingness of key leaders to stay on through a transition

Strong teams reduce execution risk and support smoother ownership changes.

Financial Discipline Is Expected

Private equity firms expect a higher level of financial rigor than many founder-led businesses maintain early on.

They focus on:

• Accuracy and consistency of financial reporting
• Clear EBITDA definitions
• Visibility into unit economics
• Forecasting and budgeting discipline

Businesses that demonstrate financial discipline are easier to diligence and integrate.

Risk Is Underwritten as Carefully as Upside

Risk matters just as much as growth potential.

Private equity firms assess:

• Customer and supplier concentration
• Platform dependency
• Regulatory or compliance exposure
• Operational complexity

Founders who proactively identify and address these risks position their business more favorably.

Private equity firms approach acquisitions with structure, discipline, and a long-term view of value creation. For eCommerce founders, understanding this perspective is essential when preparing for a sale.

The more closely a business aligns with how private equity buyers evaluate opportunities, the stronger the outcome is likely to be.