Private Equity for Founders: Advice from LDF CEO Lee Carlin

Private equity gets a mixed press among founders. I understand why. The perception is of an external party arriving with a different agenda, a tighter grip, and a shorter time horizon than the person who built the business.

My experience has been different. And I think it’s worth being honest about both sides, because the founders who get the most out of PE backing tend to be the ones who go in with clear eyes.

Let’s start with what PE can do for a founder-led business, because it’s substantial.

Done well, PE backing gives you the capital, the structure, and the strategic challenge to take your business further and faster than organic growth alone would allow. It gives you access to a network, of advisers, of expertise, of potential acquisition targets that most independently owned businesses simply don’t have. And it creates a pathway to realising genuine value from everything you’ve already built, while retaining meaningful upside in what comes next.

For founders who’ve spent years building something, often under real personal and financial pressure, that combination is powerful. PE isn’t just about cashing out. It’s about building the next chapter with serious backing behind you.

Here’s the honest part. When you take PE investment, your business changes. Not gradually – fairly quickly.

You will no longer have sole control. You will be challenged, on your strategy, your decisions, your team, your assumptions. You will need to report, to justify, and to perform against agreed targets. For founders who are used to operating with full autonomy, that adjustment is real.

The founders who handle it best are the ones who go in prepared for it, who treat the challenge as a stimulus rather than a threat, and who recognise that having a rigorous, external perspective on your business is something most founders never get until it’s too late to act on it.

PE firms invest because they see something in your business worth backing. But they also invest because they believe it can be significantly better. Be open to that conversation.

The quality of your relationship with your PE house matters enormously. Not all PE firms operate the same way, and if you’re at the stage of choosing a partner, take the time to understand how they work, not just the financial terms, but the values, the approach, the people you’ll be working with day to day.

At LDF, that’s meant a genuinely collaborative relationship with YFM, one where the challenge is real but so is the support. The decision to bring Stuart in as Chairman is a good example: that’s not something that happens in every PE relationship, and it’s made a tangible difference to how we operate. When the right people are around the table, the whole thing works differently.

The best PE relationships are genuinely collaborative. When there’s real trust, open communication, and a shared view of where the business is going, your PE partner becomes one of the most powerful accelerants you can have access to.

One of the things PE backing tends to accelerate is the need for a strong, properly structured leadership team. As the business grows and becomes more complex, the reliance on a single founder, however talented, becomes a risk that investors will want to address.

That means recruiting people who are better than you in their specific disciplines. It means creating a line of succession and building an organisation that can operate and grow without everything running through one person. For founders who’ve always been the centre of gravity in their business, that’s a significant shift. But it’s also, in my experience, one of the things that unlocks the next stage of real growth.

PE is not for everyone. But for founders who are genuinely ambitious about what their business could become, and who are prepared to be challenged, to adapt, and to build something beyond what they could achieve alone, it can be transformative.

Go in with your eyes open. Build the relationship properly. And don’t let ego get in the way of what’s possible.

Over the past three articles, Lee has shared honest lessons from his experience at London Drainage Facilities, from preparing for an acquisition, to life after the deal, and what founders should know before taking private equity investment.

No jargon. No theory. Just practical insight from someone who’s been through it.

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If you’re considering private equity investment and would like to discuss your next stage of growth, we’d love to hear from you.